10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

ý QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

FOR THE QUARTERLY PERIOD ENDED September 30, 2012

OR

¨ TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934

Commission File Number 000-19514

Gulfport Energy Corporation

(Exact Name of Registrant As Specified in Its Charter)

Delaware	73-1521290
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification Number)
14313 North May Avenue, Suite 100 Oklahoma City, Oklahoma	73134
(Address of Principal Executive Offices)	(Zip Code)

(405) 848-8807

(Registrant Telephone Number, Including Area Code)

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the past 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T during the preceding 12 months (or for such shorter period that the registrant was required to submit and post such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, or a smaller reporting company. See the definitions of “large accelerated filer,” “accelerated filer” and “smaller reporting company” in Rule 12b-2 of the Exchange Act. (Check One):

Large Accelerated Filer	x	Accelerated Filer	¨
Non-Accelerated Filer	¨	Smaller Reporting Company	¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

As of November 1, 2012, 55,717,702 shares of common stock were outstanding.

GULFPORT ENERGY CORPORATION

TABLE OF CONTENTS

		Page
PART I FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (unaudited):
	Consolidated Balance Sheets at September 30, 2012 and December 31, 2011	3
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2012 and 2011	4
	Consolidated Statements of Comprehensive Income (Loss) for the Three and Nine Months Ended September 30, 2012 and 2011	5
	Consolidated Statements of Stockholders’ Equity for the Nine Months Ended September 30, 2012 and 2011	6
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2012 and 2011	7
	Notes to Consolidated Financial Statements	8
Item 2.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	22
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	36
Item 4.	Controls and Procedures	37
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	37
Item 1.A.	Risk Factors	39
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	39
Item 3.	Defaults Upon Senior Securities	39
Item 4.	Mine Safety Disclosures	39
Item 5.	Other Information	39
Item 6.	Exhibits	42
Signatures		44

2

GULFPORT ENERGY CORPORATION CONSOLIDATED BALANCE SHEETS (Unaudited)
	September 30, 2012			December 31, 2011
Assets
Current assets:
Cash and cash equivalents	$	12,280,000		$	93,897,000
Accounts receivable - oil and gas	24,820,000			28,019,000
Accounts receivable - related parties	10,915,000			4,731,000
Prepaid expenses and other current assets	2,788,000			1,327,000
Short-term derivative instruments	808,000			1,601,000
Total current assets	51,611,000			129,575,000
Property and equipment:
Oil and natural gas properties, full-cost accounting, $234,630,000 and $138,623,000 excluded from amortization in 2012 and 2011, respectively	1,342,715,000			1,035,754,000
Other property and equipment	8,623,000			8,024,000
Accumulated depletion, depreciation, amortization and impairment	(645,560,000		)	(575,142,000		)
Property and equipment, net	705,778,000			468,636,000
Other assets
Equity investments	206,690,000			86,824,000
Other assets	5,530,000			5,123,000
Total other assets	212,220,000			91,947,000
Deferred tax asset	1,000,000			1,000,000
Total assets	$	970,609,000		$	691,158,000
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	107,058,000		$	43,872,000
Asset retirement obligation - current	60,000			620,000
Short-term derivative instruments	8,816,000			—
Current maturities of long-term debt	147,000			141,000
Total current liabilities	116,081,000			44,633,000
Long-term derivative instruments	1,523,000			—
Asset retirement obligation - long-term	13,831,000			12,033,000
Deferred tax liability	15,514,000			—
Long-term debt, net of current maturities	143,033,000			2,142,000
Total liabilities	289,982,000			58,808,000
Commitments and contingencies (Note 10)
Preferred stock, $.01 par value; 5,000,000 authorized, 30,000 authorized as redeemable 12% cumulative preferred stock, Series A; 0 issued and outstanding	—			—
Stockholders’ equity:
Common stock - $.01 par value, 100,000,000 authorized, 55,717,702 issued and outstanding in 2012 and 55,621,371 in 2011	557,000			556,000
Paid-in capital	608,010,000			604,584,000
Accumulated other comprehensive income (loss)	(4,975,000		)	2,663,000
Retained earnings	77,035,000			24,547,000
Total stockholders’ equity	680,627,000			632,350,000
Total liabilities and stockholders’ equity	$	970,609,000		$	691,158,000

See accompanying notes to consolidated financial statements.

3

GULFPORT ENERGY CORPORATION CONSOLIDATED STATEMENTS OF OPERATIONS (Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Revenues:
Oil and condensate sales	$	58,609,000		$	56,447,000		$	187,633,000		$	154,559,000
Gas sales	973,000			923,000			2,127,000			3,155,000
Natural gas liquids sales	874,000			653,000			2,374,000			2,346,000
Other income	81,000			58,000			189,000			248,000
	60,537,000			58,081,000			192,323,000			160,308,000
Costs and expenses:
Lease operating expenses	6,638,000			5,744,000			18,201,000			15,103,000
Production taxes	7,070,000			6,281,000			22,411,000			18,520,000
Depreciation, depletion, and amortization	25,377,000			14,736,000			70,424,000			40,606,000
General and administrative	3,098,000			2,034,000			9,370,000			6,209,000
Accretion expense	176,000			168,000			529,000			491,000
	42,359,000			28,963,000			120,935,000			80,929,000
INCOME FROM OPERATIONS:	18,178,000			29,118,000			71,388,000			79,379,000
OTHER (INCOME) EXPENSE:
Interest expense	1,003,000			225,000			1,630,000			1,163,000
Interest income	(6,000		)	(64,000		)	(37,000		)	(139,000		)
Loss (income) from equity method investments	1,165,000			(52,000		)	1,793,000			906,000
	2,162,000			109,000			3,386,000			1,930,000
INCOME BEFORE INCOME TAXES	16,016,000			29,009,000			68,002,000			77,449,000
INCOME TAX EXPENSE:	15,514,000			—			15,514,000			1,000
NET INCOME	$	502,000		$	29,009,000		$	52,488,000		$	77,448,000
NET INCOME PER COMMON SHARE:
Basic	$	0.01		$	0.58		$	0.94		$	1.63
Diluted	$	0.01		$	0.57		$	0.93		$	1.61
Weighted average common shares outstanding - Basic	55,692,664			50,407,240			55,658,507			47,549,672
Weighted average common shares outstanding - Diluted	56,291,792			50,905,962			56,174,581			48,008,368

See accompanying notes to consolidated financial statements.

4

GULFPORT ENERGY CORPORATION CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (LOSS) (Unaudited)
	Three Months Ended September 30,						Nine Months Ended September 30,
	2012			2011			2012			2011
Net income	$	502,000		$	29,009,000		$	52,488,000		$	77,448,000
Foreign currency translation adjustment	5,320,000			(4,855,000		)	3,394,000			(3,285,000		)
Change in fair value of derivative instruments	(19,251,000		)	10,333,000			(11,678,000		)	9,611,000
Reclassification of settled contracts	185,000			1,331,000			646,000			3,342,000
Other comprehensive income (loss)	(13,746,000		)	6,809,000			(7,638,000		)	9,668,000
Comprehensive income (loss)	$	(13,244,000	)	$	35,818,000		$	44,850,000		$	87,116,000

See accompanying notes to consolidated financial statements.

5

GULFPORT ENERGY CORPORATION CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (Unaudited)
	Common Stock			Additional Paid-in Capital			Accumulated Other Comprehensive Income (Loss)			Retained Earnings (Accumulated Deficit)			Total Stockholders’ Equity
	Shares	Amount
Balance at January 1, 2012	55,621,371	$	556,000	$	604,584,000		$	2,663,000		$	24,547,000		$	632,350,000
Net income	—	—		—			—			52,488,000			52,488,000
Other Comprehensive Loss	—	—		—			(7,638,000		)	—			(7,638,000		)
Stock Compensation	—	—		3,427,000			—			—			3,427,000
Issuance of Restricted Stock	96,331	1,000		(1,000		)	—			—			—
Balance at September 30, 2012	55,717,702	$	557,000	$	608,010,000		$	(4,975,000	)	$	77,035,000		$	680,627,000
Balance at January 1, 2011	44,645,435	$	446,000	$	296,253,000		$	(1,768,000	)	$	(83,875,000	)	$	211,056,000
Net income	—	—		—			—			77,448,000			77,448,000
Other Comprehensive Income	—	—		—			9,668,000			—			9,668,000
Stock Compensation	—	—		837,000			—			—			837,000
Issuance of Common Stock in public offering, net of related expenses	6,210,000	62,000		178,217,000			—			—			178,279,000
Issuance of Common Stock through exercise of options	41,000	1,000		396,000			—			—			397,000
Issuance of Restricted Stock	47,819	—		—			—			—			—
Balance at September 30, 2011	50,944,254	$	509,000	$	475,703,000		$	7,900,000		$	(6,427,000	)	$	477,685,000

See accompanying notes to consolidated financial statements.

6

GULFPORT ENERGY CORPORATION Consolidated Statements of Cash Flows (Unaudited)
	Nine Months Ended September 30,
	2012			2011
Cash flows from operating activities:
Net income	$	52,488,000		$	77,448,000
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion of discount - Asset Retirement Obligation	529,000			491,000
Depletion, depreciation and amortization	70,424,000			40,606,000
Stock-based compensation expense	2,056,000			502,000
Loss from equity investments	1,793,000			906,000
Interest income - note receivable	(2,000		)	(117,000		)
Unrealized loss (gain) on derivative instruments	100,000			(506,000		)
Deferred income tax expense	15,514,000			55,000
Amortization of loan commitment fees	405,000			383,000
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable	3,199,000			(7,066,000		)
Increase in accounts receivable - related party	(6,184,000		)	(1,906,000		)
Increase (decrease) in prepaid expenses	(1,461,000		)	123,000
Increase in accounts payable and accrued liabilities	28,017,000			11,127,000
Settlement of asset retirement obligation	(1,002,000		)	—
Net cash provided by operating activities	165,876,000			122,046,000
Cash flows from investing activities:
Deductions to cash held in escrow	8,000			8,000
Additions to other property and equipment	(599,000		)	(137,000		)
Additions to oil and gas properties	(269,177,000		)	(202,164,000		)
Proceeds from sale of other property and equipment	140,000			—
Proceeds from sale of oil and gas properties	—			1,384,000
Advances on note receivable to related party	—			(3,182,000		)
Contributions to equity method investments	(118,975,000		)	(26,864,000		)
Distributions from equity method investments	710,000			750,000
Net cash used in investing activities	(387,893,000		)	(230,205,000		)
Cash flows from financing activities:
Principal payments on borrowings	(12,103,000		)	(84,600,000		)
Borrowings on line of credit	153,000,000			35,000,000
Loan commitment fees	(497,000		)	(674,000		)
Proceeds from issuance of common stock, net of offering costs, and exercise of stock options	—			178,676,000
Net cash provided by financing activities	140,400,000			128,402,000
Net (decrease) increase in cash and cash equivalents	(81,617,000		)	20,243,000
Cash and cash equivalents at beginning of period	93,897,000			2,468,000
Cash and cash equivalents at end of period	$	12,280,000		$	22,711,000
Supplemental disclosure of cash flow information:
Interest payments	$	941,000		$	912,000
Income tax payments	$	255,000		$	—
Supplemental disclosure of non-cash transactions:
Capitalized stock based compensation	$	1,371,000		$	335,000
Asset retirement obligation capitalized	$	1,711,000		$	939,000
Foreign currency translation gain (loss) on investment in Grizzly Oil Sands ULC	$	3,394,000		$	(2,200,000	)
Foreign currency translation gain (loss) on note receivable - related party	$	—		$	(1,085,000	)

See accompanying notes to consolidated financial statements.

7

GULFPORT ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

These consolidated financial statements have been prepared by Gulfport Energy Corporation (the “Company” or “Gulfport”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission, and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods, on a basis consistent with the annual audited consolidated financial statements. All such adjustments are of a normal recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the summary of significant accounting policies and notes thereto included in the Company’s most recent annual report on Form 10-K. Results for the three month and nine month periods ended September 30, 2012 are not necessarily indicative of the results expected for the full year.

1. ACQUISITIONS

Beginning in February 2011, the Company entered into agreements to acquire certain leasehold interests located in the Utica Shale in Ohio. Certain of the agreements also granted the Company an exclusive right of first refusal for a period of six months on certain additional tracts leased by the seller. Gulfport is the operator on this acreage in the Utica Shale. As of September 30, 2012, the Company had acquired leasehold interests in approximately 128,000 gross (64,000 net) acres in the Utica Shale for approximately $205.8 million. Gulfport funded these transactions with a portion of the proceeds from public offerings of an aggregate of 6.2 million shares of the Company’s common stock completed in March and July of 2011. Entities controlled by Wexford Capital LP (“Wexford”) have participated with the Company on a 50/50 basis in the acquisition of all leases described above.

2. ACCOUNTS RECEIVABLE – RELATED PARTY

Included in the accompanying September 30, 2012 and December 31, 2011 consolidated balance sheets are amounts receivable from related parties of the Company. These receivables consist primarily of amounts billed by the Company to related parties as operator of such parties' Colorado and Ohio oil and gas properties. At September 30, 2012 and December 31, 2011, these receivables totaled $10,915,000 and $4,731,000, respectively.

The Company is a party to administrative service agreements with Stampede Farms LLC (“Stampede”), Everest Operations Management LLC (“Everest”) and Tatex Thailand III, LLC (“Tatex III”), which agreements were each entered into effective March 1, 2008. Under these agreements, the Company’s services include professional and technical support and the fees for such services can be amended by mutual agreement of the parties. Each of these administrative service agreements may be cancelled (1) by the Company with at least 60 days prior written notice, (2) by the counterparty at any time with at least 30 days prior written notice to the Company and (3) by either party if the other party is in material breach and such breach has not been cured within 30 days of receipt of written notice of such breach. The Company did not provide services under any of these agreements in 2011 or 2012 and received no reimbursements thereunder. Each of Stampede, Everest and Tatex III is controlled by Wexford. Charles E. Davidson is the Chairman and Chief Investment Officer of Wexford and he beneficially owned approximately 13.3% and less than 1% of the Company’s outstanding common stock as of December 31, 2011 and September 28, 2012, respectively.

Effective July 1, 2008, the Company entered into an acquisition team agreement with Everest to identify and evaluate potential oil and gas properties in which the Company and Everest or its affiliates may wish to invest. Upon a successful closing of an acquisition or divestiture, the party identifying the acquisition or divestiture is entitled to receive a fee from the other party and its affiliates, if applicable, participating in such closing. The fee is equal to 1% of the party’s proportionate share of the acquisition or divestiture consideration. The agreement may be terminated by either party upon 30 days notice. Affiliates of Everest were billed approximately $360,000 and $893,000 under this acquisition team agreement during the three months and nine months ended September 30, 2012, respectively, and $466,000 and $867,000 during the three months and nine months ended September 30, 2011, respectively, which amounts are reflected as a reduction of general and administrative expenses in the consolidated statements of operations.

Effective April 1, 2010, the Company entered into an area of mutual interest agreement with Windsor Niobrara LLC (“Windsor Niobrara”), an entity controlled by Wexford, to jointly acquire oil and gas leases on certain lands located in Northwest Colorado for the purpose of exploring, exploiting and producing oil and gas from the Niobrara Formation. The agreement provides that each party must offer the other party the right to participate in such acquisitions on a 50%/50% basis.

8

The parties also agreed, subject to certain exceptions, to share third-party costs and expenses in proportion to their respective participating interests and pay certain other fees as provided in the agreement. In connection with this agreement, Gulfport and Windsor Niobrara also entered into a development agreement, effective as of April 1, 2010, pursuant to which the Company and Windsor Niobrara agreed to jointly develop the contract area, and Gulfport agreed to act as the operator under the terms of a joint operating agreement.

3. PROPERTY AND EQUIPMENT

The major categories of property and equipment and related accumulated depletion, depreciation, amortization and impairment as of September 30, 2012 and December 31, 2011 are as follows:

	September 30, 2012			December 31, 2011
Oil and natural gas properties	$	1,342,715,000		$	1,035,754,000
Office furniture and fixtures	4,437,000			3,692,000
Building	3,926,000			4,049,000
Land	260,000			283,000
Total property and equipment	1,351,338,000			1,043,778,000
Accumulated depletion, depreciation, amortization and impairment	(645,560,000		)	(575,142,000		)
Property and equipment, net	$	705,778,000		$	468,636,000

Included in oil and gas properties at September 30, 2012 is the cumulative capitalization of $29,664,000 in general and administrative costs incurred and capitalized to the full cost pool. General and administrative costs capitalized to the full cost pool represent management’s estimate of costs incurred directly related to exploration and development activities such as geological and other administrative costs associated with overseeing the exploration and development activities. All general and administrative costs not directly associated with exploration and development activities were charged to expense as they were incurred. Capitalized general and administrative costs were approximately $2,034,000 and $6,170,000 for the three months and nine months ended September 30, 2012, respectively, and $1,338,000 and $4,126,000 for the three months and nine months ended September 30, 2011, respectively.

The following table summarizes the Company’s non-producing properties excluded from amortization by area at September 30, 2012:

	September 30, 2012
West Texas Permian	$	14,661,000
Colorado	5,871,000
Bakken	300,000
Southern Louisiana	761,000
Ohio	207,281,000
Belize	5,711,000
Other	45,000
	$	234,630,000

The Company evaluates the costs excluded from its amortization calculation at least annually. Subject to industry conditions and the level of the Company’s activities, the inclusion of most of the above referenced costs into the Company’s amortization calculation is expected to occur within three to five years.

A reconciliation of the asset retirement obligation for the nine months ended September 30, 2012 and 2011 is as follows:

9

	September 30, 2012			September 30, 2011
Asset retirement obligation, beginning of period	$	12,653,000		$	10,845,000
Liabilities incurred	1,711,000			939,000
Liabilities settled	(1,002,000		)	—
Accretion expense	529,000			491,000
Asset retirement obligation as of end of period	13,891,000			12,275,000
Less current portion	60,000			635,000
Asset retirement obligation, long-term	$	13,831,000		$	11,640,000

On May 7, 2012, the Company entered into a contribution agreement with Diamondback Energy, Inc., (“Diamondback”). Under the terms of the contribution agreement, the Company agreed to contribute to Diamondback, prior to the closing of the Diamondback initial public offering (“Diamondback IPO”), all its oil and gas interests in the Permian Basin (the "Contribution"). The Contribution was completed on October 11, 2012. At the closing of the Contribution, Diamondback issued to the Company (i) 7,914,036 shares of Diamondback common stock and (ii) a promissory note for $63.6 million, which was repaid to the Company at the closing of the Diamondback IPO on October 17, 2012. This aggregate consideration is subject to a post-closing cash adjustment based on changes in the working capital, long-term debt and other items of Windsor Permian LLC (“Windsor Permian”) referred to in the contribution agreement as of the date of the Contribution. Windsor Permian is a wholly-owned subsidiary of Diamondback. If the Contribution had closed on September 30, 2012, based on Diamondback's preliminary estimates, Diamondback would have owed Gulfport approximately $16.0 million for this post-closing adjustment. However, the actual amount due based on the October 11, 2012 closing date has not been determined, and the actual amount may vary materially from the estimated amount on September 30, 2012. Under the contribution agreement, the Company is generally responsible for all liabilities and obligations with respect to the contributed properties arising prior to the Contribution and Diamondback is responsible for such liabilities and obligations with respect to the contributed properties arising after the Contribution.

In connection with the Contribution, the Company and Diamondback entered into an investor rights agreement under which the Company has the right, for so long as it beneficially owns more than 10% of Diamondback’s outstanding common stock, to designate one individual as a nominee to serve on Diamondback’s board of directors. Such nominee, if elected to Diamondback’s board, will also serve on each committee of the board so long as he or she satisfies the independence and other requirements for service on the applicable committee of the board. So long as the Company has the right to designate a nominee to Diamondback’s board and there is no Gulfport nominee actually serving as a Diamondback director, the Company has the right to appoint one individual as an advisor to the board who shall be entitled to attend board and committee meetings. The Company is also entitled to certain information rights and Diamondback granted the Company certain demand and “piggyback” registration rights obligating Diamondback to register with the Securities and Exchange Commission (the "SEC") any shares of Diamondback common stock that the Company owns. Immediately upon completion of the Contribution, the Company owned a 35% equity interest in Diamondback, rather than leasehold interests in the Company’s Permian Basin acreage. Upon completion of the Diamondback IPO on October 17, 2012, Gulfport owned approximately 22.5% of Diamondback's outstanding common stock. On October 18, 2012, the underwriters of the Diamondback IPO exercised in full their option to purchase additional shares of common stock of Diamondback and, upon the closing of such purchase on October 23, 2012, Gulfport owned approximately 21.4% of Diamondback's outstanding common stock. The Company's investment in Diamondback will be accounted for as an equity method investment going forward.

4. EQUITY INVESTMENTS

Investments accounted for by the equity method consist of the following as of September 30, 2012 and December 31, 2011:

10

	September 30, 2012		December 31, 2011
Investment in Tatex Thailand II, LLC	$	319,000	$	1,030,000
Investment in Tatex Thailand III, LLC	8,683,000		8,282,000
Investment in Grizzly Oil Sands ULC	164,974,000		69,008,000
Investment in Bison Drilling and Field Services LLC	14,109,000		6,366,000
Investment in Muskie Holdings LLC	5,840,000		2,138,000
Investment in Timber Wolf Terminals LLC	952,000		—
Investment in Windsor Midstream LLC	7,928,000		—
Investment in Stingray Pressure Pumping LLC	3,599,000		—
Investment in Stingray Cementing LLC	286,000		—
Investment in Blackhawk Midstream LLC	—		—
	$	206,690,000	$	86,824,000

Tatex Thailand II, LLC

The Company has a 23.5% ownership interest in Tatex Thailand II, LLC (“Tatex”). The remaining interests in Tatex are owned by entities controlled by Wexford. Tatex holds 85,122 of the 1,000,000 outstanding shares of APICO, LLC (“APICO”), an international oil and gas exploration company. APICO has a reserve base located in Southeast Asia through its ownership of concessions covering two million acres which includes the Phu Horm Field. During the nine months ended September 30, 2012, Gulfport received $710,000 in distributions, reducing its total net investment in Tatex to $319,000. The loss on equity investment related to Tatex was immaterial for the nine months ended September 30, 2012 and 2011.

Tatex Thailand III, LLC

The Company has a 17.9% ownership interest in Tatex III. Approximately 68.7% of the remaining interests in Tatex III are owned by entities controlled by Wexford. During the nine months ended September 30, 2012, Gulfport paid $627,000 in cash calls, increasing its total net investment in Tatex III to $8,683,000. The Company recognized a loss on equity investment of $226,000 and $199,000 for the nine months ended September 30, 2012 and 2011, respectively, which is included in loss (income) from equity method investments in the consolidated statements of operations.

Grizzly Oil Sands ULC

The Company, through its wholly owned subsidiary Grizzly Holdings Inc. (“Grizzly Holdings”), owns a 24.9999% interest in Grizzly Oil Sands ULC, a Canadian unlimited liability company (“Grizzly”). The remaining interest in Grizzly is owned by an entity controlled by Wexford. Since 2006, Grizzly has acquired leases in the Athabasca region located in the Alberta Province near Fort McMurray and other oil sands development projects. Grizzly has drilled core holes and water supply test wells in eleven separate lease blocks for feasibility of oil production and conducted a seismic program. In March 2010, Grizzly filed an application in Alberta, Canada for the development of a SAGD facility at Algar Lake. In November 2011, the Government of Alberta provided a formal Order-in Council authorizing the Alberta Energy Resources Conservation Board (ERCB) to issue formal regulatory approval of the project. Fabrication and onsite construction on the first phase of development at Algar Lake is currently underway. During the nine months ended September 30, 2012, Gulfport paid $93,436,000 in cash calls, increasing Gulfport’s net investment in Grizzly to $164,974,000. Grizzly’s functional currency is the Canadian dollar. The Company’s investment in Grizzly was increased by $5,320,000 and $3,394,000 as a result of a currency translation gain for the three months and nine months ended September 30, 2012, respectively. The Company recognized a loss on equity investment of $280,000 and $864,000 for the three months and nine months ended September 30, 2012, respectively, and $182,000 and $995,000 for the three months and nine months ended September 30, 2011, respectively, which is included in loss (income) from equity method investments in the consolidated statements of operations.

The Company, through Grizzly Holdings, entered into a loan agreement with Grizzly effective January 1, 2008, as amended from time-to-time, under which Grizzly borrowed funds from the Company. Interest was paid on a paid-in-kind basis by increasing the outstanding balance of the loan. The Company recognized interest income of approximately $41,000 and $117,000 for the three months and nine months ended September 30, 2011, respectively, which is included in interest income in the consolidated statements of operations. Effective December 7, 2011, Grizzly Holdings entered into a debt settlement agreement with Grizzly under which Grizzly agreed to satisfy the entire outstanding debt by issuing additional common shares of Grizzly with no effect to the composition of the ownership structure of Grizzly. At such date, the Company’s investment in

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Grizzly increased by the total $22,325,000 of outstanding advances and accrued interest due from Grizzly, the cumulative $75,000 currency translation loss for the note receivable was adjusted through accumulated other comprehensive income and the note receivable was considered paid in full.

Bison Drilling and Field Services LLC

During the third quarter of 2011, the Company purchased a 25% ownership interest in Bison Drilling and Field Services LLC (“Bison”) at a cost of $6,009,000, subject to adjustment. In April 2012, the Company purchased an additional 15% ownership interest in Bison for $6,152,000, bringing its total ownership interest in Bison to 40%. The remaining interests in Bison are owned by entities controlled by Wexford. Bison owns and operates drilling rigs. During the nine months ended September 30, 2012, Gulfport paid $1,373,000 in cash calls, increasing its total net investment in Bison to $14,109,000. The Company recognized a loss on equity investment of $119,000 and income on equity investment of $218,000 for the three months and nine months ended September 30, 2012, respectively, which is included in loss (income) from equity method investments in the consolidated statements of operations.

The Company entered into a loan agreement with Bison effective May 15, 2012, under which Bison may borrow funds from the Company. Interest accrues at LIBOR plus 0.28% or 8%, whichever is lower, and shall be paid on a paid-in-kind basis by increasing the outstanding balance of the loan. The loan has a maturity date of January 31, 2015. The Company loaned Bison $1,594,000 during the nine months ended September 30, 2012, all of which was repaid by Bison during the third quarter 2012. The interest income recognized on the note was immaterial for the three months and nine months ended September 30, 2012.

Muskie Holdings LLC

During the fourth quarter of 2011, the Company purchased a 25% ownership interest in Muskie Holdings LLC (“Muskie”) at a cost of $2,142,000, subject to adjustment. The remaining interests in Muskie are owned by entities controlled by Wexford. Muskie holds certain assets, real estate and rights in a lease covering land in Wisconsin that is prospective for mining oil and natural gas fracture grade sand. During the nine months ended September 30, 2012, Gulfport paid $3,884,000 in cash calls, increasing its total net investment in Muskie to $5,840,000. The Company recognized a loss on equity investment of $110,000 and $182,000 for the three months and nine months ended September 30, 2012, respectively, which is included in loss (income) from equity method investments in the consolidated statements of operations.

Timber Wolf Terminals LLC

During the first quarter of 2012, the Company purchased a 50% ownership interest in Timber Wolf Terminals LLC (“Timber Wolf”) at a cost of $1,000,000. The remaining interests in Timber Wolf are owned by entities controlled by Wexford. Timber Wolf will operate a crude/condensate terminal and a sand transloading facility in Ohio. The Company recognized a loss on equity investment of $25,000 and $48,000 for the three months and nine months months ended September 30, 2012, respectively, which is included in loss (income) from equity method investments in the consolidated statements of operations.

Windsor Midstream LLC

During the first quarter of 2012, the Company purchased a 22.5% ownership interest in Windsor Midstream LLC (“Midstream”) at a cost of $7,021,000. The remaining interests in Midstream are owned by entities controlled by Wexford. Midstream owns a 28.4% interest in MidMar Gas LLC, a gas processing plant in West Texas. During the nine months ended September 30, 2012, the Company paid $702,000 in cash calls, increasing its total net investment in Midstream to $7,928,000. The Company recognized income on equity investment of $90,000 and $205,000 for the three months and nine months ended September 30, 2012, respectively, which is included in loss (income) from equity method investments in the consolidated statements of operations.

Stingray Pressure Pumping LLC

During the second quarter of 2012, the Company purchased a 50% ownership interest in Stingray Pressure Pumping LLC ("Stingray Pressure"). The remaining interest in Stingray Pressure is owned by an entity controlled by Wexford. Stingray Pressure provides well completion services. During the nine months ended September 30, 2012, the Company paid $4,132,000 in cash calls, increasing its total net investment in Stingray Pressure to $3,599,000. The Company recognized a loss on equity investment of $446,000 and $533,000 for the three months and nine months ended September 30, 2012, which is included in loss (income) from equity method investments in the consolidated statements of operations.

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Stingray Cementing LLC

During the second quarter of 2012, the Company purchased a 50% ownership interest in Stingray Cementing LLC ("Stingray Cementing"). The remaining interest in Stingray Cementing is owned by an entity controlled by Wexford. Stingray Cementing provides well cementing services. During the nine months ended September 30, 2012, the Company paid $291,000 in cash calls, increasing its net investment in Stingray Cementing to $286,000. The loss on equity investment related to Stingray Cementing was immaterial for the three months and nine months ended September 30, 2012.     

Blackhawk Midstream LLC

During the second quarter of 2012, the Company purchased a 50% ownership interest in Blackhawk Midstream LLC ("Blackhawk"). The remaining interest in Blackhawk is owned by an entity controlled by Wexford. Blackhawk coordinates gathering, compression, processing and marketing activities for the Company in connection with the development of its Utica Shale acreage. During the nine months ended September 30, 2012, the Company paid $357,000 in cash calls. The Company recognized a loss on equity investment of $113,000 and $357,000 for the three months and nine months ended September 30, 2012, which is included in loss (income) from equity method investments in the consolidated statements of operations.

5. OTHER ASSETS

Other assets consist of the following as of September 30, 2012 and December 31, 2011:

	September 30, 2012		December 31, 2011
Plugging and abandonment escrow account on the WCBB properties (Note 10)	$	3,113,000	$	3,121,000
Certificates of deposit securing letter of credit	275,000		275,000
Prepaid drilling costs	536,000		228,000
Loan commitment fees, net	1,602,000		1,495,000
Deposits	4,000		4,000
	$	5,530,000	$	5,123,000

6. LONG-TERM DEBT

A breakdown of long-term debt as of September 30, 2012 and December 31, 2011 is as follows:

	September 30, 2012			December 31, 2011
Revolving credit agreement (1)	$	141,000,000		$	—
Building loans (2)	2,180,000			2,283,000
Less: current maturities of long term debt	(147,000		)	(141,000		)
Debt reflected as long term	$	143,033,000		$	2,142,000

Maturities of long-term debt as of September 30, 2012 are as follows:

2013	$	147,000
2014	156,000
2015	141,166,000
2016	1,711,000
2017	—
Thereafter	—
Total	$	143,180,000

(1) On September 30, 2010, the Company entered into a $100.0 million senior secured revolving credit agreement with The Bank of Nova Scotia, as administrative agent and letter of credit issuer and lead arranger, and Amegy Bank National Association. The revolving credit facility initially matured on September 30, 2013 and had an initial borrowing base

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availability of $50.0 million, which was increased to $65.0 million effective December 24, 2010. The credit agreement is secured by substantially all of the Company’s assets. The Company’s wholly-owned subsidiaries guaranteed the obligations of the Company under the credit agreement.

On May 3, 2011, the Company entered into a first amendment to the revolving credit agreement with The Bank of Nova Scotia, Amegy Bank, Key Bank National Association (“Key Bank”) and Société Générale. Pursuant to the terms of the first amendment, Key Bank and Société Générale were added as additional lenders, the maximum amount of the facility was increased to $350.0 million, the borrowing base was increased to $90.0 million, certain fees and rates payable by the Company under the credit agreement were decreased, and the maturity date was extended until May 3, 2015. On October 31, 2011, the Company entered into additional amendments to its revolving credit facility pursuant to which, among other things, the borrowing base under this facility was increased to $125.0 million. Effective May 2, 2012, the Company entered into additional amendments to its revolving credit facility pursuant to which, among other things, the borrowing base was increased to $155.0 million and Credit Suisse, Deutsche Bank Trust Company Americas and Iberiabank were added as additional lenders and Société Générale left the bank group. As of September 30, 2012, approximately $141,000,000 was outstanding under the revolving credit facility.

On October 9, 2012, the Company entered into an amendment to its revolving credit facility that modified certain covenants to permit the offering of its 7.750% Senior Notes due 2012 ("the Note Offering") described in Note 14 below. The Note Offering closed on October 17, 2012 and the Company repaid all indebtedness outstanding under its revolving credit facility on that date with a portion of the proceeds from the Note Offering. Effective as of October 17, 2012, the Company amended its revolving credit facility to lower the applicable rates (i) from a range of 1.00% to 1.75% to a range of 0.75% to 1.50% for the base rate loans and (ii) from a range of 2.00% to 2.75% to a range of 1.75% to 2.50% for the Eurodollar rate loans and letters of credit. This amendment also lowered the commitment fees for Level 1 and Level 2 usage levels, in each case, from 0.50% per annum to 0.375% per annum. Also, effective as of October 17, 2012, in connection with the completion of the Note Offering and the Contribution, the Company's borrowing base under the credit facility was reduced to $45.0 million until the next borrowing base redetermination.

Advances under the revolving credit facility, as amended, may be in the form of either base rate loans or eurodollar loans. The interest rate for base rate loans is equal to (1) the applicable rate, which ranges from 0.75% to 1.50%, plus (2) the highest of: (a) the federal funds rate plus 0.5%, (b) the rate of interest in effect for such day as publicly announced from time to time by agent as its “prime rate,” and (c) the eurodollar rate for an interest period of one month plus 1.00%. The interest rate for eurodollar loans is equal to (1) the applicable rate, which ranges from 1.75% to 2.50%, plus (2) the London interbank offered rate that appears on Reuters Screen LIBOR01 Page for deposits in U.S. dollars, or, if such rate is not available, the offered rate on such other page or service that displays the average British Bankers Association Interest Settlement Rate for deposits in U.S. dollars, or, if such rate is not available, the average quotations for three major New York money center banks of whom the agent shall inquire as the “London Interbank Offered Rate” for deposits in U.S. dollars. At September 30, 2012, amounts borrowed under the revolving credit facility bore interest at the eurodollar rate (2.98%).

The revolving credit facility contains customary negative covenants including, but not limited to, restrictions on the Company’s and its subsidiaries’ ability to: incur indebtedness; grant liens; pay dividends and make other restricted payments; make investments; make fundamental changes; enter into swap contracts and forward sales contracts; dispose of assets; change the nature of their business; and enter into transactions with their affiliates. The negative covenants are subject to certain exceptions as specified in the credit agreement. The revolving credit facility also contains certain affirmative covenants, including, but not limited to the following financial covenants: (1) the ratio of funded debt to EBITDAX (net income, excluding any non-cash revenue or expense associated with swap contracts resulting from ASC 815, plus without duplication and to the extent deducted from revenues in determining net income, the sum of (a) the aggregate amount of consolidated interest expense for such period, (b) the aggregate amount of income, franchise, capital or similar tax expense (other than ad valorem taxes) for such period, (c) all amounts attributable to depletion, depreciation, amortization and asset or goodwill impairment or writedown for such period, (d) all other non-cash charges, (e) non-cash losses from minority investments, (f) actual cash distributions received from minority investments, (g) to the extent actually reimbursed by insurance, expenses with respect to liability on casualty events or business interruption, and (h) all reasonable transaction expenses related to dispositions and acquisitions of assets, investments and debt and equity offerings, and less non-cash income attributable to equity income from minority investments) for a twelve-month period may not be greater than 2.00 to 1.00; and (2) the ratio of EBITDAX to interest expense for a twelve-month period may not be less than 3.00 to 1.00. The Company was in compliance with these financial covenants at September 30, 2012.

(2) In March 2011, the Company entered into a new building loan agreement for the office building it occupies in Oklahoma City, Oklahoma. The new loan agreement refinanced the $2.4 million outstanding under the previous building loan agreement. The new agreement extended the maturity date of the building loan to February 2016 and reduced the interest rate

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to 5.82% per annum. The new building loan requires monthly interest and principal payments of approximately $22,000 and is collateralized by the Oklahoma City office building and associated land.

7. STOCK-BASED COMPENSATION

During the three months and nine months ended September 30, 2012, the Company’s stock-based compensation expense was $1,157,000 and $3,427,000, respectively, of which the Company capitalized $463,000 and $1,371,000, respectively, relating to its exploration and development efforts. During the three months and nine months ended September 30, 2011, the Company’s stock-based compensation expense was $384,000 and $837,000, respectively, of which the Company capitalized $154,000 and $335,000, respectively, relating to its exploration and development efforts.

Options and restricted common stock are reported as share based payments and their fair value is amortized to expense using the straight-line method over the vesting period. The shares of stock issued once the options are exercised will be from authorized but unissued common stock.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses certain assumptions. Expected volatilities are based on the historical volatility of the market price of Gulfport’s common stock over a period of time ending on the grant date. Based upon historical experience of the Company, the expected term of options granted is equal to the vesting period plus one year. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The 2005 Stock Incentive Plan provides that all options must have an exercise price not less than the fair value of the Company’s common stock on the date of the grant.

No stock options were issued during the nine months ended September 30, 2012 and 2011.

The Company has not declared dividends and does not intend to do so in the foreseeable future, and thus did not use a dividend yield. In each case, the actual value that will be realized, if any, depends on the future performance of the common stock and overall stock market conditions. There is no assurance that the value an optionee actually realizes will be at or near the value estimated using the Black-Scholes model.

A summary of the status of stock options and related activity for the nine months ended September 30, 2012 is presented below:

	Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding at December 31, 2011	356,241	$	6.51	3.41	$	8,172,000
Granted	—	—
Exercised	—	—
Forfeited/expired	—	—
Options outstanding at September 30, 2012	356,241	$	6.51	2.66	$	8,816,000
Options exercisable at September 30, 2012	356,241	$	6.51	2.66	$	8,816,000

The following table summarizes information about the stock options outstanding at September 30, 2012:

Exercise Price		Number Outstanding	Weighted Average Remaining Life (in years)	Number Exercisable
$	3.36	206,241	2.31	206,241
$	9.07	25,000	2.94	25,000
$	11.20	125,000	3.17	125,000
		356,241		356,241

The following table summarizes restricted stock activity for the nine months ended September 30, 2012:

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	Number of Unvested Restricted Shares		Weighted Average Grant Date Fair Value
Unvested shares as of December 31, 2011	203,348		$	26.02
Granted	183,500		36.09
Vested	(96,331	)	30.17
Forfeited	(9,334	)	22.76
Unvested shares as of September 30, 2012	281,183		$	31.28

Unrecognized compensation expense as of September 30, 2012 related to outstanding stock options and restricted shares was $7,801,000. The expense is expected to be recognized over a weighted average period of 1.69 years.

8. EARNINGS PER SHARE

A reconciliation of the components of basic and diluted net income per common share is presented in the table below:

	For the Three Months Ended September 30,
	2012					2011
	Income		Shares	Per Share		Income		Shares	Per Share
Basic:
Net income	$	502,000	55,692,664	$	0.01	$	29,009,000	50,407,240	$	0.58
Effect of dilutive securities:
Stock options and restricted stock awards	—		599,128			—		498,722
Diluted:
Net income	$	502,000	56,291,792	$	0.01	$	29,009,000	50,905,962	$	0.57

	For the Nine Months Ended September 30,
	2012					2011
	2012		Shares	Per Share		Income		Shares	Per Share
Basic:
Net income	$	52,488,000	55,658,507	$	0.94	$	77,448,000	47,549,672	$	1.63
Effect of dilutive securities:
Stock options and restricted stock awards	—		516,074			—		458,696
Diluted:
Net income	$	52,488,000	56,174,581	$	0.93	$	77,448,000	48,008,368	$	1.61

There were no potential shares of common stock that were considered anti-dilutive during the three months and nine months ended September 30, 2012 and 2011.

9. NEW ACCOUNTING STANDARDS

In May 2011, the FASB issued Accounting Standards Update No. 2011-04, “Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS,” which provides amendments to FASB ASC Topic 820, “Fair Value Measurements and Disclosure” (“FASB ASC 820”). The purpose of the amendments in this update is to create common fair value measurement and disclosure requirements between GAAP and IFRS. The amendments change certain fair value measurement principles and enhance the disclosure requirements. The amendments to FASB ASC 820 are effective for interim and annual periods beginning after December 15, 2011. The adoption did not have a material impact on the Company’s consolidated financial statements.

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In June 2011, the FASB issued Accounting Standards Update No. 2011-05, “Comprehensive Income: Presentation of Comprehensive Income,” which provides amendments to FASB ASC Topic 220, “Comprehensive Income” (“FASB ASC 220”). The purpose of the amendments in this update is to provide a more consistent method of presenting non-owner transactions that affect an entity’s equity. The amendments eliminate the option to report other comprehensive income and its components in the statement of changes in stockholders’ equity and require an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. The amendments to FASB ASC 220 are effective for interim and annual periods beginning after December 15, 2011 and should be applied retrospectively. The components of other comprehensive income and total comprehensive income are presented in the accompanying consolidated statements of comprehensive income (loss).

10. COMMITMENTS AND CONTINGENCIES

Plugging and Abandonment Funds

In connection with the acquisition in 1997 of the remaining 50% interest in the Company's West Cote Blanche Bay ("WCBB") properties, the Company assumed the seller’s (Chevron) obligation to contribute approximately $18,000 per month through March 2004, to a plugging and abandonment trust and the obligation to plug a minimum of 20 wells per year for 20 years commencing March 11, 1997. Chevron retained a security interest in production from these properties until abandonment obligations to Chevron have been fulfilled. Beginning in 2009, the Company could access the trust for use in plugging and abandonment charges associated with the property, although it has not yet done so. As of September 30, 2012, the plugging and abandonment trust totaled approximately $3,113,000. At September 30, 2012, the Company had plugged 354 wells at WCBB since it began its plugging program in 1997, which management believes fulfills its current minimum plugging obligation.

Litigation

The Louisiana Department of Revenue (“LDR”) is disputing Gulfport’s severance tax payments to the State of Louisiana from the sale of oil under fixed price contracts during the years 2005 through 2007. The LDR maintains that Gulfport paid approximately $1,800,000 less in severance taxes under fixed price terms than the severance taxes Gulfport would have had to pay had Gulfport paid severance taxes on the oil at the contracted market rates only. Gulfport has denied any liability to the LDR for underpayment of severance taxes and has maintained that it was entitled to enter into the fixed price contracts with unrelated third parties and pay severance taxes based upon the proceeds received under those contracts. Gulfport has maintained its right to contest any final assessment or suit for collection if brought by the State. On April 20, 2009, the LDR filed a lawsuit in the 15^th Judicial District Court, Lafayette Parish, in Louisiana against Gulfport seeking $2,275,729 in severance taxes, plus interest and court costs. Gulfport filed a response denying any liability to the LDR for underpayment of severance taxes and is defending itself in the lawsuit. The LDR had taken no further action on this lawsuit since filing its petition until recently when it propounded discovery requests to which Gulfport has responded. Since Gulfport served discovery requests on the LDR and received the LDR’s responses, there has been no further activity in this case and no trial date has been set.

In December 2010, the LDR filed two identical lawsuits against Gulfport in different venues to recover allegedly underpaid severance taxes on crude oil for the period January 1, 2007 through December 31, 2010, together with a claim for attorney’s fees. The petitions do not make any specific claim for damages or unpaid taxes. As with the first lawsuit filed by the LDR in 2009, Gulfport has denied all liability and will vigorously defend the lawsuit. The cases are in the early stages, and Gulfport has not yet filed a response to these lawsuits. Recently, the LDR filed motions to stay the lawsuits before Gulfport filed any responsive pleadings. The LDR has advised Gulfport that it intends to pursue settlement discussions with Gulfport and other similarly situated defendants in separate proceedings, but has taken no action to initiate settlement talks. There has been no activity on either of these lawsuits for more than a year.

Other Litigation

In November 2006, Cudd Pressure Control, Inc. (“Cudd”) filed a lawsuit against Gulfport, Great White Pressure Control LLC (“Great White”) and six former Cudd employees in the 129th Judicial District Harris County, Texas. The lawsuit was subsequently removed to the United States District Court for the Southern District of Texas (Houston Division). The lawsuit alleged RICO violations and several other causes of action relating to Great White’s employment of the former Cudd employees and sought unspecified monetary damages and injunctive relief. On stipulation by the parties, the plaintiff’s RICO claim was dismissed without prejudice by order of the court on February 14, 2007. Gulfport filed a motion for summary judgment on October 5, 2007. The court entered a final interlocutory judgment in favor of all defendants, including Gulfport,

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on April 8, 2008. On November 3, 2008, Cudd filed its appeal with the U.S. Court of Appeals for the Fifth Circuit. The Fifth Circuit vacated the district court decision finding, among other things, that the district court should not have entered summary judgment without first allowing more discovery. The case was remanded to the district court, and Cudd filed a motion to remand the case to the original state court, which motion was granted. Cudd subsequently filed amended petitions with the state court (a) alleging, among other things, that Gulfport conspired with the other defendants to misappropriate, and misappropriated Cudd’s trade secrets and caused its employees to breach their fiduciary duties, and (b) seeking monetary damages including $11.8 million as a reasonable royalty for the alleged use of its trade secrets. Cudd also sought disgorgement of the alleged benefits received by the various defendants. Cudd also sought its attorney's fees, which Cudd claimed were not less than $450,000, plus 10% of any final judgment. This case went to trial on September 5, 2012 and on September 28, 2012 the jury rendered its verdict, awarding no damages to the plaintiffs. Gulfport along with all defendants filed a Motion for Entry of Judgment that is consistent for with the jury's verdict. Cudd filed an Application for Disgorgement and a Motion for Judgment Notwithstanding the Verdict. The court denied all of Cudd's post-trial motions on October 12, 2012, and the defendants are waiting for the court to enter a judgment consistent for with the jury's verdict.

On July 30, 2010, six individuals and one limited liability company sued 15 oil and gas companies in Cameron Parish Louisiana for contamination across the surface of where the defendants operated in an action entitled Reeds et al. v. BP American Production Company et al., 38th Judicial District. No. 10-18714. The plaintiffs’ original petition for damages, which did not name Gulfport as a defendant, alleges that the plaintiffs’ property located in Cameron Parish, Louisiana within the Hackberry oil field is contaminated as a result of historic oil and gas exploration and production activities. Plaintiffs allege that the defendants conducted, directed and participated in various oil and gas exploration and production activities on their property which allegedly have contaminated or otherwise caused damage to the property, and have sued the defendants for alleged breaches of oil, gas and mineral leases, as well as for alleged negligence, trespass, failure to warn, strict liability, punitive damages, lease liability, contract liability, unjust enrichment, restoration damages, assessment and response costs and stigma damages. On December 7, 2010, Gulfport was served with a copy of the plaintiffs’ first supplemental and amending petition which added four additional plaintiffs and six additional defendants, including Gulfport, bringing the total number of defendants to 21. It also increased the total acreage at issue in this litigation from 240 acres to approximately 1,700 acres. In addition to the damages sought in the original petition, the plaintiffs now also seek: damages sufficient to cover the cost of conducting a comprehensive environmental assessment of all present and yet unidentified pollution and contamination of their property; the cost to restore the property to its pre-polluted original condition; damages for mental anguish and annoyance, discomfort and inconvenience caused by the nuisance created by defendants; land loss and subsidence damages and the cost of backfilling canals and other excavations; damages for loss of use of land and lost profits and income; attorney fees and expenses and damages for evaluation and remediation of any contamination that threatens groundwater. In addition to Gulfport, current defendants include ExxonMobil Oil Corporation, Mobil Exploration & Producing North America Inc., Chevron U.S.A. Inc., The Superior Oil Company, Union Oil Company of California, BP America Production Company, Tempest Oil Company, Inc., ConocoPhillips Company, Continental Oil Company, WM. T. Burton Industries, Inc., Freeport Sulphur Company, Eagle Petroleum Company, U.S. Oil of Louisiana, M&S Oil Company, and Empire Land Corporation, Inc. of Delaware. On January 21, 2011, Gulfport filed a pleading challenging the legal sufficiency of the petitions on several grounds and requesting that they either be dismissed or that plaintiffs be required to amend such petitions. In response to the pleadings filed by Gulfport and similar pleadings filed by other defendants, the plaintiffs filed a third amending petition with exhibits which expands the description of the property at issue, attaches numerous aerial photos and identifies the mineral leases at issue. In response, Gulfport and numerous defendants re-urged their pleadings challenging the legal sufficiency of the petitions. Some of the defendants’ grounds for challenging the plaintiffs’ petitions were heard by the court on May 25, 2011 and were denied. The court signed the written judgment on December 9, 2011. Gulfport noticed its intent to seek supervisory review on December 19, 2011 and the trial court fixed a return date of January 11, 2012 for the filing of the writ application. Gulfport filed its supervisory writ, which was recently denied by the Louisiana Third Circuit Court of Appeal and the Louisiana Supreme Court. Gulfport has been active in serving discovery requests and responding to discovery requests from the plaintiffs. It is anticipated that the discovery phase of this case will become more active in the upcoming months. Plaintiffs' counsel is seeking a trial date in mid-2013.

Due to the current stages of the LDR and Reed litigation, the outcome is uncertain and management cannot determine the amount of loss, if any, that may result. In each case management has determined the possibility of loss is remote. However, litigation is inherently uncertain. Adverse decisions in one or more of the above matters could have a material adverse effect on the Company’s financial condition or results of operations and management cannot determine the amount of loss, if any, that may result.

The Company has been named as a defendant in various other lawsuits related to its business. In each such case, management has determined that the possibility of loss is remote. The resolution of these matters is not expected to have a material adverse effect on the Company financial condition or results of operations in future periods

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11. HEDGING ACTIVITIES

The Company seeks to reduce its exposure to unfavorable changes in oil prices, which are subject to significant and often volatile fluctuation, by entering into fixed price swaps and forward sales contracts. These contracts allow the Company to predict with greater certainty the effective oil prices to be received for hedged production and benefit operating cash flows and earnings when market prices are less than the fixed prices provided in the contracts. However, the Company will not benefit from market prices that are higher than the fixed prices in the contracts for hedged production.

The Company accounts for its oil derivative instruments as cash flow hedges for accounting purposes under FASB ASC 815 and related pronouncements. All derivative contracts are marked to market each quarter end and are included in the accompanying consolidated balance sheets as derivative assets and liabilities.

During the third quarter of 2011 and the first and third quarters of 2012, the Company entered into fixed price swap contracts for 2012 and 2013 with the purchaser of the Company’s WCBB oil and four financial institutions. The Company’s fixed price swap contracts are tied to the commodity prices on the International Petroleum Exchange (“IPE”). The Company will receive the fixed price amount stated in the contract and pay to its counterparty the current market price for oil as listed on the IPE for Brent Crude. At September 30, 2012, the Company had the following fixed price swaps in place:

	Daily Volume (Bbls/day)	Weighted Average Price
October - December 2012	4,000	$	107.29
January - June 2013	4,000	$	103.33
July - December 2013	3,000	$	100.04

At September 30, 2012 the fair value of derivative assets related to the fixed price swaps was as follows:

Short-term derivative instruments – asset	$	808,000
Short-term derivative instruments - liability	$	8,816,000
Long-term derivative instruments - liability	$	1,523,000

All fixed price swaps and forward sales contracts have been executed in connection with the Company’s oil price hedging program. For fixed price swaps qualifying as cash flow hedges pursuant to FASB ASC 815, the realized contract price is included in oil sales in the period for which the underlying production was hedged.

For derivatives designated as cash flow hedges and meeting the effectiveness guidelines of FASB ASC 815, changes in fair value are recognized in accumulated other comprehensive income until the hedged item is recognized in earnings. Amounts reclassified out of accumulated other comprehensive income into earnings as a component of oil and condensate sales for the nine months ended September 30, 2012 and 2011 are presented below.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012			2011
Reduction to oil and condensate sales	(185,000	)	(1,331,000	)	$	(646,000	)	$	(3,342,000	)

The Company expects to reclassify $1,647,000 out of accumulated other comprehensive income into earnings as a component of oil and condensate sales during the remainder of the year ended December 31, 2012 related to fixed price swaps.

Hedge effectiveness is measured at least quarterly based on the relative changes in fair value between the derivative contract and the hedged item over time. Any change in fair value resulting from ineffectiveness is recognized immediately in earnings. The Company recognized a loss of $179,000 and $100,000 related to hedge ineffectiveness for the three months and nine months ended September 30, 2012, respectively, which is included in oil and condensate sales in the consolidated statements of operations. The Company did not recognize into earnings any amount related to hedge ineffectiveness for the nine months ended September 30, 2011.

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12. FAIR VALUE MEASUREMENTS

The Company follows FASB ASC 820 for all financial and non-financial assets and liabilities. FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The statement establishes market or observable inputs as the preferred sources of values, followed by assumptions based on hypothetical transactions in the absence of market inputs. The statement requires fair value measurements be classified and disclosed in one of the following categories:

Level 1 – Quoted prices in active markets for identical assets and liabilities.

Level 2 – Quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 – Significant inputs to the valuation model are unobservable.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.

The following table summarizes the Company’s financial assets and liabilities by FASB ASC 820 valuation level as of September 30, 2012:

	As of September 30, 2012
	Level 1		Level 2		Level 3
Assets:
Fixed price swaps	$	—	$	808,000	$	—
Liabilities:
Fixed price swaps	$	—	$	10,339,000	$	—

The estimated fair value of the Company’s fixed price swaps was based upon forward commodity prices based on quoted market prices, adjusted for differentials.

The Company estimates asset retirement obligations pursuant to the provisions of FASB ASC Topic 410, “Asset Retirement and Environmental Obligations” (“FASB ASC 410”). The initial measurement of asset retirement obligations at fair value is calculated using discounted cash flow techniques and based on internal estimates of future retirement costs associated with oil and gas properties. Given the unobservable nature of the inputs, including plugging costs and reserve lives, the initial measurement of the asset retirement obligation liability is deemed to use Level 3 inputs. See Note 3 for further discussion of the Company’s asset retirement obligations. Asset retirement obligations incurred during the nine months ended September 30, 2012 were approximately $1,711,000.

The carrying amounts on the accompanying consolidated balance sheet for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and current and long-term debt are carried at cost, which approximates market value.

13. INCOME TAXES

At September 30, 2012, the Company revised the projected annual effective rate based upon the latest taxable income forecast that includes the impact of the Diamondback Contribution discussed in Note 3.  As a result, the Company determined on a more likely than not basis, it would recognize approximately $8,992,000 of its deferred tax assets which had previously been subject to a valuation allowance.  In addition, the Company recognized a $15,514,000 deferred income tax expense due to the revised projected annual effective rate, which is included in income tax expense in the consolidated statements of operations.  The Company continues to provide a valuation allowance of approximately $3,355,000 against certain state net operating losses which may expire before utilization.

14. SUBSEQUENT EVENTS

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On October 17, 2012, the Company issued $250 million in aggregate principal amount of 7.750% Senior Notes due 2020 (the “Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act under an indenture among the Company, the Company's subsidiary guarantors and Wells Fargo Bank, National Association, as the trustee. Pursuant to the indenture, interest on the Notes will accrue at a rate of 7.750% per annum on the outstanding principal amount from October 17, 2012, payable semi-annually on May 1 and November 1 of each year, commencing on May 1, 2013.

The Notes are senior unsecured obligations and rank equally in the right of payment with all of the Company's other senior indebtedness and senior in right of payment to any of the Company's future subordinated indebtedness. All of the Company's existing and future restricted subsidiaries that guarantee its secured revolving credit facility or certain other debt guarantee the Notes, provided, however, that the Notes are not guaranteed by Grizzly Holdings, Inc. and will not be guaranteed by any of the Company's future unrestricted subsidiaries. The guarantees rank equally in the right of payment with all of the senior indebtedness of the subsidiary guarantors and senior in the right of payment to any future subordinated indebtedness of the subsidiary guarantors. The Notes and the guarantees are effectively subordinated to all of the Company's and the subsidiary guarantors' secured indebtedness (including all borrowings and other obligations under its revolving credit facility) to the extent of the value of the collateral securing such indebtedness, and structurally subordinated to all indebtedness and other liabilities of any of the Company's subsidiaries that do not guarantee the Notes.

The Company may redeem some or all of the Notes at any time on or after November 1, 2016, at the redemption prices listed in the indenture. Prior to November 1, 2016, the Company may redeem the Notes at a price equal to 100% of the principal amount plus a “make-whole” premium. In addition, prior to November 1, 2015, the Company may redeem up to 35% of the aggregate principal amount of the Notes with the net proceeds of certain equity offerings, provided that at least 65% of the aggregate principal amount of the Notes initially issued remains outstanding immediately after such redemption.

If the Company experiences a change of control (as defined in the indenture), it will be required to make an offer to repurchase the Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase. If the Company sells certain assets and fails to use the proceeds in a manner specified in the indenture, it will be required to use the remaining proceeds to make an offer to repurchase the Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase.

The indenture contains certain covenants that, subject to certain exceptions and qualifications, among other things, limit the Company's ability and the ability of its restricted subsidiaries to incur or guarantee additional indebtedness, make certain investments, declare or pay dividends or make distributions on capital stock, prepay subordinated indebtedness, sell assets including capital stock of restricted subsidiaries, agree to payment restrictions affecting the Company's restricted subsidiaries, consolidate, merge, sell or otherwise dispose of all or substantially all of the Company's assets, enter into transactions with affiliates, incur liens, engage in business other than the oil and gas business and designate certain of the Company's subsidiaries as unrestricted subsidiaries.

On October 17, 2012, the Company repaid all outstanding indebtedness under its revolving credit facility with a portion of the net proceeds from the Note Offering. The Company intends to use the remaining net proceeds for general corporate purposes, including the funding of a portion of its 2012 and 2013 capital development plans.

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ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and audited consolidated financial statements and related notes thereto included in our Annual Report on Form 10-K and with the unaudited consolidated financial statements and related notes thereto presented in this Quarterly Report on Form 10-Q.

Disclosure Regarding Forward-Looking Statements

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts included in this report that address activities, events or developments that we expect or anticipate will or may occur in the future, including such things as estimated future net revenues from oil and gas reserves and the present value thereof, future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strength, goals, expansion and growth of our business and operations, plans, references to future success, reference to intentions as to future matters and other such matters are forward-looking statements. These statements are based on certain assumptions and analyses made by us in light of our experience and our perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate in the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, general economic, market or business conditions; the opportunities (or lack thereof) that may be presented to and pursued by us; competitive actions by other oil and natural gas companies; changes in laws or regulations; hurricanes and other natural disasters and other factors, including those listed in the “Risk Factors” section of our most recent Annual Report on Form 10-K, many of which are beyond our control. Consequently, all of the forward-looking statements made in this report are qualified by these cautionary statements, and we cannot assure you that the actual results or developments anticipated by us will be realized or, even if realized, that they will have the expected consequences to or effects on us, our business or operations. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.

Overview

We are an independent oil and natural gas exploration and production company focused on the exploration, exploitation, acquisition and production of crude oil, natural gas liquids and natural gas in the United States. Our corporate strategy is to internally identify prospects, acquire lands encompassing those prospects and evaluate those prospects using subsurface geology and geophysical data and exploratory drilling. Using this strategy, we have developed an oil and natural gas portfolio of proved reserves, as well as development and exploratory drilling opportunities on high potential conventional and unconventional oil and natural gas prospects. Our principal producing properties are located along the Louisiana Gulf Coast in the West Cote Blanche Bay, or WCBB, and Hackberry fields. During 2010, we acquired our initial acreage position in the Niobrara Formation of northwestern Colorado. During 2011, we acquired our initial acreage position in the Utica Shale in Eastern Ohio and our first well in the Utica Shale was spud in February 2012. As of November 1, 2012, we had spud 11 additional wells in the Utica Shale. On October 11, 2012, we completed the Contribution described below under the heading “-Contribution.” As a result, we now hold an equity interest in Diamondback Energy, Inc., or Diamondback, rather than leasehold interests in the Permian Basin acreage operated by Diamondback. We also hold a significant acreage position in the Alberta oil sands in Canada through our interest in Grizzly Oil Sands ULC, or Grizzly, and have interests in entities that operate in Southeast Asia, including the Phu Horm gas field in Thailand. We seek to achieve reserve growth and increase our cash flow through our annual drilling programs.

Contribution

On May 7, 2012, we entered into a contribution agreement with Diamondback. Under the terms of the contribution agreement, we agreed to contribute to Diamondback, prior to the closing of Diamondback's initial public offering, or the Diamondback IPO, all of our oil and gas interests in the Permian Basin. On October 11, 2012, we completed this contribution, which we refer to herein as the Contribution. At the closing of the Contribution, Diamondback issued to us (i) 7,914,036 shares of Diamondback common stock and (ii) a promissory note for $63.6 million, which was repaid to us at the closing of the Diamondback IPO on October 17, 2012. This aggregate consideration is subject to a post-closing cash adjustment based on changes in the working capital, long-term debt and other items of Windsor Permian LLC, or Windsor Permian, referred to in the contribution agreement as of the date of the Contribution. Windsor Permian is a wholly-owned subsidiary of Diamondback. If the Contribution had closed on September 30, 2012, based on Diamondback's preliminary estimates, Diamondback would

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have owed us approximately $16.0 million for this post-closing adjustment. However, the actual amount due based on the October 11, 2012 closing date has not been determined, and the actual amount may vary materially from the estimated amount on September 30, 2012. Under the contribution agreement, we are generally responsible for all liabilities and obligations with respect to the contributed properties arising prior to the Contribution and Diamondback is responsible for such liabilities and obligations with respect to the contributed properties arising after the Contribution.

In connection with the Contribution, we and Diamondback entered into an investor rights agreement in which we have the right, for so long as we beneficially own more than 10% of Diamondback's outstanding common stock, to designate one individual as a nominee to serve on Diamondback's board of directors. Such nominee, if elected to Diamondback's board, will also serve on each committee of the board so long as he or she satisfies the independence and other requirements for service on the applicable committee of the board. So long as we have the right to designate a nominee to Diamondback's board and there is no nominee of ours actually serving as a Diamondback director, we will have the right to appoint one individual as an advisor to the board who shall be entitled to attend board and committee meetings. We are also entitled to certain information rights and Diamondback granted us certain demand and “piggyback” registration rights obligating Diamondback to register with the Securities and Exchange Commission, or the SEC, any shares of Diamondback common stock that we own. Immediately upon completion of the Contribution, we owned a 35% equity interest in Diamondback, rather than leasehold interests in our Permian Basin acreage. Upon completion of the Diamondback IPO on October 17, 2012, we owned approximately 22.5% of Diamondback's outstanding common stock. On October 18, 2012, the underwriters of the Diamondback IPO exercised in full their option to purchase additional shares of common stock of Diamondback and, upon the closing of such purchase on October 23, 2012, we owned approximately 21.4% of Diamondback's outstanding common stock. Our investment in Diamondback will be accounted for as an equity method investment going forward.

Third Quarter 2012 Operational Highlights

• Oil and natural gas revenues increased 4% to $60.5 million for the three months ended September 30, 2012 from $58.0 million for the three months ended September 30, 2011.

• Net income decreased 98% to $0.5 million for the three months ended September 30, 2012 from $29.0 million for the three months ended September 30, 2011, primarily due to deferred income tax expense of $15.5 million for the three months ended September 30, 2012 based upon the latest taxable income forecast that includes the affects of the contribution of our Permian Basin assets to Diamondback.

• Production increased 11% to approximately 655,000 barrels of oil equivalent, or BOE, for the three months ended September 30, 2012 from approximately 590,000 BOE for the three months ended September 30, 2011.

• During the three months ended September 30, 2012, we, and in some cases other operators, drilled 26 gross (18.5 net) wells and recompleted 25 gross (24.3 net) wells. Of these 26 gross new wells at September 30, 2012, 11 had been completed as producing wells, ten were waiting on completion, two were resting and three were being drilled.

• During 2011 and through September 30, 2012, we acquired leasehold interests in approximately 128,000 gross (64,000 net) acres in the Utica Shale in Eastern Ohio. We spud our first well on our Utica Shale acreage in February 2012 and subsequently have spud 11 additional wells. Between August 1 and October 31, 2012, we brought our first well on line and tested five additional wells. See “2012 Production and Drilling Activity - Utica Shale (Eastern Ohio)” below for a summary of the initial results from these wells.

2012 Production and Drilling Activity

During the three months ended September 30, 2012, our total net production was 579,000 barrels of oil, 315,000 thousand cubic feet, or Mcf, of gas, and 996,000 gallons of natural gas liquids, or NGLs, for a total of 655,000 BOE as compared to 545,000 barrels of oil, 196,000 Mcf of gas and 505,000 gallons of NGLs, or 590,000 BOE, for the three months ended September 30, 2011. Our total net production averaged approximately 7,124 BOE per day during the three months ended September 30, 2012 as compared to 6,414 BOE per day during the same period in 2011. The 11% increase in production is primarily related to the 2012 drilling and recompletion activities in our fields.

WCBB. From January 1, 2012 through November 1, 2012, we recompleted 49 existing wells. We also spud 29 wells, of which 24 were completed as producers and two were non-productive and, at November 1, 2012, two were waiting on

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completion and one was being drilled. We currently intend to recomplete a total of approximately 60 existing wells and drill a total of 30 wells during 2012.

Aggregate net production from the WCBB field during the three months ended September 30, 2012 was 252,876 BOE, or 2,749 BOE per day, 96% of which was from oil and 4% of which was from natural gas. During October 2012, our average daily net production at WCBB was approximately 3,024 BOE, 98% of which was from oil and 2% of which was from natural gas. The increase in October 2012 production was the result of the timing of 2012 drilling and the impact of Hurricane Isaac in August 2012.

East Hackberry Field. From January 1, 2012 through November 1, 2012, we recompleted 26 existing wells. We also spud 21 wells, of which 15 were completed as producers and three were non-productive and, at November 1, 2012, one was waiting on completion and two were being drilled. During 2009, we entered into a two-year exploration agreement with an active gulf coast operator covering approximately 2,868 net acres adjacent to our field. We are the designated operator under the agreement and will participate in proposed wells with at least a 70% working interest. We currently intend to drill 22 wells and recomplete 26 wells in our East Hackberry field in 2012.

Aggregate net production from the East Hackberry field during the three months ended September 30, 2012 was approximately 257,799 BOE, or 2,802 BOE per day, 97% of which was from oil and 3% of which was from natural gas. During October 2012, our average daily net production at East Hackberry was approximately 2,231 BOE, 97% of which was from oil and 3% of which was from natural gas. The decrease in October 2012 production was the result of natural production declines.

West Hackberry Field. Aggregate net production from the West Hackberry field during the three months ended September 30, 2012 was approximately 3,243 BOE, or 35 BOE per day. During October 2012, our average daily net production at West Hackberry was approximately 18 BOE, 100% of which was from oil.

Permian Basin. From January 1, 2012 through the closing of the Contribution on October 11, 2012, 19 gross (8.3 net) wells, including our first horizontal well, were spud on our Permian Basin acreage, all of which were completed as producers. One gross (0.3 net) existing well was recompleted from January 1, 2012 to October 11, 2012.

Aggregate net production from our Permian Basin acreage during the three months ended September 30, 2012 was approximately 110,846 BOE, or 1,205 BOE per day. During the first eleven days of October 2012, the average daily net production from our Permian Basin acreage was approximately 1,156 BOE, of which approximately 66% was oil, 19% was natural gas liquids and 15% was natural gas.

As discussed above under the heading “-Contribution,” on October 11, 2012, we contributed to Diamondback, prior to the closing of the Diamondback IPO, all of our oil and natural gas interests in the Permian Basin. At the closing of the Contribution, Diamondback issued to us (i) 7,914,036 shares of Diamondback common stock and (ii) a promissory note for $63.6 million, which was repaid to us at the closing of the Diamondback IPO on October 17, 2012. This aggregate consideration is subject to a post-closing cash adjustment based on changes in the working capital, long-term debt and other items of Windsor Permian referred to in the contribution agreement as of the date of the Contribution. As of October 23, 2012, following the closing of the Diamondback IPO and the underwriters' exercise in full of their option to purchase additional shares of common stock of Diamondback, we owned approximately 21.4% of Diamondback's outstanding common stock.

Niobrara Formation. Effective as of April 1, 2010, we acquired leasehold interests in the Niobrara Formation in Colorado and held leases for approximately 11,693 acres as of September 30, 2012. From January 1, 2012 through November 1, 2012, three gross (1.0 net) wells, including one gross (0.03 net) well drilled by another operator, were spud on our Niobrara Formation acreage, two of which were completed as producers and one was non-productive. Aggregate net production from the Niobrara play during the three months ended September 30, 2012 was approximately 4,756 BOE, or 52 BOE per day, 100% of which was from oil. During October 2012, average daily net production in Niobrara was approximately 47 BOE.

We have completed a 60 square mile 3-D seismic survey over our Craig Dome prospect and have received a processed version of the seismic. We currently intend to drill two gross wells in the Niobrara Formation during 2012.

Bakken. In the Bakken Formation, as of September 30, 2012, we held approximately 800 net acres, interests in eight wells and overriding royalty interests in certain existing and future wells.

Aggregate net production from the Bakken Formation during the three months ended September 30, 2012 was approximately 7,295 BOE, or 79 BOE per day. During October 2012, our average daily net production from the Bakken formation was approximately 86 BOE. There are no new activities currently scheduled for 2012 for our Bakken acreage.

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Utica Shale (Eastern Ohio). As of September 30, 2012, we had acquired leasehold interests in approximately 128,000 gross (64,000 net) acres in the Utica Shale in Eastern Ohio. We spud our first well, the Wagner 1-28H, on our Utica Shale acreage in February 2012 and, as of November 1, 2012, had spud 11 additional wells. In August 2012, the first well was brought online and tested at a gross peak rate of 17.1 million cubic feet, or MMcf, of natural gas per day, 432 barrels of condensate per day and 1,881 barrels of NGLs per day assuming full ethane recovery and a natural gas shrink of 18%, or 4,650 BOE per day. Our second well, the Boy Scout 1-33H, tested at a peak rate of 1,560 barrels of condensate per day, 7.1 MMcf of natural gas per day and 1,008 barrels of NGLs per day assuming full ethane recovery and a natural gas shrink of 25%, or 3,456 BOE per day. In October 2012, four more wells were tested. The Shugert 1-1H was tested at a peak rate of 20.0 MMcf of natural gas per day, 144 barrels of condensate per day and 2,002 barrels of NGLs per day assuming full ethane recovery and a natural gas shrink of 17%, or 4,913 BOE per day. The Ryser 1-25H tested at a peak rate of 1,488 barrels of condensate per day, 5.9 MMcf of natural gas per day and 649 barrels of NGLs per day assuming full ethane recovery and a natural gas shrink of 21%, or 2,914 BOE per day. The Groh 1-12H tested at a peak rate of 1,186 barrels of condensate per day, 2.8 MMcf of natural gas per day and 367 barrels of NGLs per day assuming full ethane recovery and a natural gas shrink of 18%, or 1,935 BOE per day. After only a 30-day resting period, the BK Stephens 1-16H tested at a peak rate of 1,224 barrels of condensate per day, 6.9 MMcf per day of natural gas and 759 barrels of NGLs per day assuming full ethane recovery and a natural gas shrink of 11%, or 3,007 BOE per day. In addition, one gross (0.05 net) well was drilled by another operator on our Utica Shale acreage between January 1, 2012 and November 1, 2012.

Aggregate net production from the Utica Shale during the three months ended September 30, 2012 was approximately 17,764 BOE, or 193 BOE per day, 13% of which was from oil and 87% of which was from natural gas. During October 2012, our average daily net production from the Utica Shale was approximately 328 BOE, 18% of which was from oil and natural gas liquids and 82% of which was from natural gas.

Grizzly. We, through our wholly-owned subsidiary Grizzly Holdings Inc., own a 24.9% interest in Grizzly. The remaining interest in Grizzly is owned by an entity controlled by Wexford. As of September 30, 2012, Grizzly had approximately 800,000 acres under lease in the Athabasca region located in the Alberta Province near Fort McMurray within a few miles of other existing oil sands projects. Our total net investment in Grizzly was approximately $165.0 million as of September 30, 2012. As of that date, Grizzly had drilled an aggregate of 232 core holes and seven water supply test wells, tested eleven separate lease blocks and conducted a seismic program. In March 2010, Grizzly filed an application for the development of an 11,300 barrel per day oil sand project at Algar Lake. In November 2011, the Government of Alberta provided a formal Order-in Council authorizing the Alberta Energy Resources Conservation Board (ERCB) to issue the formal regulatory approval of Grizzly’s Algar Lake SAGD project. During the second quarter of 2012, Grizzly finished SAGD well pair drilling at Algar Lake and began the process of completing those well pairs for SAGD injection and production. In the first quarter of 2012, Grizzly completed the acquisition of approximately 47,000 acres through the purchase of its May River property and recently set forth a full field development plan for this property under which May River will be developed in multiple phases with the goal of producing 70,000 barrels per day of bitumen by the year 2020. Grizzly’s contemplated 2012 activities included the completion of the 2011/2012 core hole drilling and seismic program, submission of a SAGD project regulatory application for Thickwood Hills and the development of its Algar Lake SAGD project, which included the fabrication and onsite construction of a central processing facility and the drilling of ten initial SAGD well pairs which has now been completed.

Thailand. We own a 23.5% ownership interest in Tatex Thailand II, LLC, or Tatex II. The remaining interests in Tatex II are owned by entities controlled by Wexford. Tatex II, a privately held entity, holds 85,122 of the 1,000,000 outstanding shares of APICO, LLC, or APICO, an international oil and gas exploration company. APICO has a reserve base located in Southeast Asia through its ownership of concessions covering approximately two million acres which includes the Phu Horm Field. As of September 30, 2012, our net investment in Tatex II was $0.3 million. Our investment is accounted for on the equity method. Tatex II accounts for its investment in APICO using the cost method. During the third quarter ended September 30, 2012, net gas production from the Phu Horm field was approximately 93 MMcf per day and condensate production was 426 barrels per day. Hess Corporation operates the field with a 35% interest. Other interest owners include APICO (35% interest), PTTEP (20% interest) and ExxonMobil (10% interest). Our gross working interest (through Tatex II as a member of APICO) in the Phu Horm field is 0.7%. Since our ownership in the Phu Horm field is indirect and Tatex II’s investment in APICO is accounted for by the cost method, these reserves are not included in our year-end reserve information.

We also own a 17.9% ownership interest in Tatex Thailand III, LLC, or Tatex III. Approximately 68.7% of the remaining interests in Tatex III are owned by entities controlled by Wexford. Tatex III owns a concession covering approximately one million acres. During the nine months ended September 30, 2012, we paid $0.6 million in cash calls, bringing our total investment in Tatex III to $8.7 million. The first well was drilled on our concession in 2010 and was temporarily abandoned pending further scientific evaluation. Drilling of the second well concluded in March 2011. The second

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well was drilled to a depth of 15,026 feet and logged approximately 5,000 feet of apparent possible gas saturated column. The well experienced gas shows and carried a flare measuring up to 25 feet throughout drilling below the intermediate casing point of 9,695 feet. During testing, the well produced at rates as high as 16 MMcf per day of gas for short intervals, but would subsequently fall to a sustained rate of two MMcf per day of gas. Pressure buildup information confirmed that this wellbore lacked the permeability to deliver commercial quantities of gas. Despite an apparently well-developed porosity system suggesting potential for a large amount of gas in place, testing of the well did not exhibit that there was sufficient permeability to produce in commercial quantities. Tatex III intends to continue testing some of the structures identified through its 3-D seismic survey and has begun the application process for two more drilling locations. Tatex III currently expects to drill the first of these wells, located to the south of the TEW-E well, in 2013.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We have identified certain of these policies as being of particular importance to the portrayal of our financial position and results of operations and which require the application of significant judgment by our management. We analyze our estimates including those related to oil and natural gas properties, revenue recognition, income taxes and commitments and contingencies, and base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Oil and Natural Gas Properties. We use the full cost method of accounting for oil and natural gas operations. Accordingly, all costs, including non-productive costs and certain general and administrative costs directly associated with acquisition, exploration and development of oil and natural gas properties, are capitalized. Companies that use the full cost method of accounting for oil and gas properties are required to perform a ceiling test each quarter. The test determines a limit, or ceiling, on the book value of the oil and gas properties. Net capitalized costs are limited to the lower of unamortized cost net of deferred income taxes or the cost center ceiling. The cost center ceiling is defined as the sum of (a) estimated future net revenues, discounted at 10% per annum, from proved reserves, based on the 12-month unweighted average of the first-day-of-the-month price for the applicable period, adjusted for any contract provisions or financial derivatives, if any, that hedge our oil and natural gas revenue, and excluding the estimated abandonment costs for properties with asset retirement obligations recorded on the balance sheet, (b) the cost of properties not being amortized, if any, and (c) the lower of cost or market value of unproved properties included in the cost being amortized, including related deferred taxes for differences between the book and tax basis of the oil and natural gas properties. If the net book value, including related deferred taxes, exceeds the ceiling, an impairment or noncash writedown is required. Such capitalized costs, including the estimated future development costs and site remediation costs of proved undeveloped properties are depleted by an equivalent units-of-production method, converting gas to barrels at the ratio of six Mcf of gas to one barrel of oil. No gain or loss is recognized upon the disposal of oil and natural gas properties, unless such dispositions significantly alter the relationship between capitalized costs and proven oil and natural gas reserves. Oil and natural gas properties not subject to amortization consist of the cost of undeveloped leaseholds and totaled $234.6 million at September 30, 2012 and $138.6 million at December 31, 2011. These costs are reviewed quarterly by management for impairment, with the impairment provision included in the cost of oil and natural gas properties subject to amortization. Factors considered by management in its impairment assessment include our drilling results and those of other operators, the terms of oil and natural gas leases not held by production and available funds for exploration and development.

Ceiling Test. Companies that use the full cost method of accounting for oil and gas properties are required to perform a ceiling test each quarter. The test determines a limit, or ceiling, on the book value of the oil and gas properties. Net capitalized costs are limited to the lower of unamortized cost net of deferred income taxes or the cost center ceiling. The cost center ceiling is defined as the sum of (a) estimated future net revenues, discounted at 10% per annum, from proved reserves, based on the 12-month unweighted average of the first-day-of-the-month price for the applicable period, adjusted for any contract provisions or financial derivatives, if any, that hedge our oil and natural gas revenue, and excluding the estimated abandonment costs for properties with asset retirement obligations recorded on the balance sheet, (b) the cost of properties not being amortized, if any, and (c) the lower of cost or market value of unproved properties included in the cost being amortized, including related deferred taxes for differences between the book and tax basis of the oil and natural gas properties. If the net book value, including related deferred taxes, exceeds the ceiling, an impairment or noncash writedown is required. Ceiling test impairment can give us a significant loss for a particular period; however, future depletion expense would be reduced. A decline in oil and

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gas prices may result in an impairment of oil and gas properties. For instance, as a result of the drop in commodity prices on December 31, 2008 and subsequent reduction in our proved reserves, we recognized a ceiling test impairment of $272.7 million for the year ended December 31, 2008. If prices of oil, natural gas and NGLs decline, we may be required to further write down the value of our oil and gas properties, which could negatively affect our results of operations. No ceiling test impairment was required for the quarter ended September 30, 2012.

Asset Retirement Obligations. We have obligations to remove equipment and restore land at the end of oil and gas production operations. Our removal and restoration obligations are primarily associated with plugging and abandoning wells and associated production facilities.

We account for abandonment and restoration liabilities under FASB ASC 410 which requires us to record a liability equal to the fair value of the estimated cost to retire an asset. The asset retirement liability is recorded in the period in which the obligation meets the definition of a liability, which is generally when the asset is placed into service. When the liability is initially recorded, we increase the carrying amount of the related long-lived asset by an amount equal to the original liability. The liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related long-lived asset. Upon settlement of the liability or the sale of the well, the liability is reversed. These liability amounts may change because of changes in asset lives, estimated costs of abandonment or legal or statutory remediation requirements.

The fair value of the liability associated with these retirement obligations is determined using significant assumptions, including current estimates of the plugging and abandonment or retirement, annual inflations of these costs, the productive life of the asset and our risk adjusted cost to settle such obligations discounted using our credit adjustment risk free interest rate. Changes in any of these assumptions can result in significant revisions to the estimated asset retirement obligation. Revisions to the asset retirement obligation are recorded with an offsetting change to the carrying amount of the related long-lived asset, resulting in prospective changes to depreciation, depletion and amortization expense and accretion of discount. Because of the subjectivity of assumptions and the relatively long life of most of our oil and natural gas assets, the costs to ultimately retire these assets may vary significantly from previous estimates.

Oil and Gas Reserve Quantities. Our estimate of proved reserves is based on the quantities of oil and natural gas that engineering and geological analysis demonstrate, with reasonable certainty, to be recoverable from established reservoirs in the future under current operating and economic parameters. Netherland, Sewell & Associates, Inc., Ryder Scott Company and to a lesser extent our personnel have prepared reserve reports of our reserve estimates at December 31, 2011 on a well-by-well basis for our properties.

Reserves and their relation to estimated future net cash flows impact our depletion and impairment calculations. As a result, adjustments to depletion and impairment are made concurrently with changes to reserve estimates. Our reserve estimates and the projected cash flows derived from these reserve estimates have been prepared in accordance with SEC guidelines. The accuracy of our reserve estimates is a function of many factors including the following:

• the quality and quantity of available data;

• the interpretation of that data;

• the accuracy of various mandated economic assumptions; and

• the judgments of the individuals preparing the estimates.

Our proved reserve estimates are a function of many assumptions, all of which could deviate significantly from actual results. Therefore, reserve estimates may materially vary from the ultimate quantities of oil and natural gas eventually recovered.

Income Taxes. We use the asset and liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences of (1) temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities and (2) operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are based on enacted tax rates applicable to the future period when those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income during the period the rate change is enacted. Deferred tax assets are recognized in the year in which realization becomes determinable. Periodically, management performs a forecast of its taxable income to determine whether it is more likely than not that a valuation allowance is needed, looking at both positive and negative factors. A valuation allowance for our deferred tax assets is established, if in management’s opinion, it is more likely than not that some portion will not be realized.

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At September 30, 2012, a valuation allowance of $3.4 million had been provided for certain deferred tax assets based upon the uncertainty of whether these assets will be realized.

Revenue Recognition. We derive almost all of our revenue from the sale of crude oil and natural gas produced from our oil and gas properties. Revenue is recorded in the month the product is delivered to the purchaser. We receive payment on substantially all of these sales from one to three months after delivery. At the end of each month, we estimate the amount of production delivered to purchasers that month and the price we will receive. Variances between our estimated revenue and actual payment received for all prior months are recorded at the end of the quarter after payment is received. Historically, our actual payments have not significantly deviated from our accruals.

Commitments and Contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation or other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. We are involved in certain litigation for which the outcome is uncertain. Changes in the certainty and the ability to reasonably estimate a loss amount, if any, may result in the recognition and subsequent payment of legal liabilities.

Derivative Instruments and Hedging Activities. We seek to reduce our exposure to unfavorable changes in oil prices by utilizing energy swaps and collars, or fixed-price contracts. We follow the provisions of FASB ASC 815, “Derivatives and Hedging,” as amended. It requires that all derivative instruments be recognized as assets or liabilities in the balance sheet, measured at fair value. We estimate the fair value of all derivative instruments using established index prices and other sources. These values are based upon, among other things, futures prices, correlation between index prices and our realized prices, time to maturity and credit risk. The values reported in the financial statements change as these estimates are revised to reflect actual results, changes in market conditions or other factors.

The accounting for changes in the fair value of a derivative depends on the intended use of the derivative and the resulting designation. Designation is established at the inception of a derivative, but re-designation is permitted. For derivatives designated as cash flow hedges and meeting the effectiveness guidelines of FASB ASC 815, changes in fair value are recognized in accumulated other comprehensive income until the hedged item is recognized in earnings. Hedge effectiveness is measured at least quarterly based on the relative changes in fair value between the derivative contract and the hedged item over time. We recognize any change in fair value resulting from ineffectiveness immediately in earnings.

To mitigate the effects of commodity price fluctuations, in November 2010, we entered into fixed price swaps for 2,000 barrels of oil per day at a weighted average price of $86.96 per barrel for the period January 2011 through December 2011. For January 2012 through February 2012, we entered into fixed price swaps for 2,000 barrels of oil per day at a weighted average price of $108.00 per barrel. For the period from March 2012 through July 2012, we entered into fixed price swaps for 3,000 barrels of oil per day at a weighted average price of $109.73 per barrel. For the period from August 2012 through December 2012, we entered into fixed price swaps for 4,000 barrels of oil per day at a weighted average price of $107.29. For the period from January 2013 through June 2013, we entered into fixed price swaps for 4,000 barrels of oil per day at a weighted average price of $103.33 per barrel. For the period from July 2013 through December 2013, we entered into fixed price swaps for 3,000 barrels of oil per day at a weighted average price of $100.04. Under the 2011 contracts, we hedged approximately 31% of our 2011 production. Under the 2012 contracts, we have hedged approximately 43% to 44% of our estimated 2012 production. Such arrangements may expose us to risk of financial loss in certain circumstances, including instances where production is less than expected or oil prices increase. These fixed price swaps are accounted for as cash flow hedges and recorded at fair value pursuant to FASB ASC 815 and related pronouncements.

RESULTS OF OPERATIONS

Comparison of the Three Months Ended September 30, 2012 and 2011

We reported net income of $502,000 for the three months ended September 30, 2012, as compared to $29,009,000 for the three months ended September 30, 2011. This 98% decrease in period-to-period net income was due primarily to $15,514,000 of deferred income tax expense, a 16% increase in lease operating expenses, a 52% increase in general and administrative expenses, a 13% increase in production taxes and a 6% decrease in realized BOE prices to $92.24 from $98.32, partially offset by an 11% increase in net production to 655,000 BOE from 590,000 BOE for the quarter ended September 30, 2012 as compared to the quarter ended September 30, 2011.

Oil and Gas Revenues. For the three months ended September 30, 2012, we reported oil and natural gas revenues of $60,456,000 as compared to oil and natural gas revenues of $58,023,000 during the same period in 2011. This $2,433,000, or 4%, increase in revenues is primarily attributable to an 11% increase in net production to 655,000 BOE from 590,000 BOE,

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partially offset by a 6% decrease in realized BOE prices to $92.24 from $98.32 for the quarter ended September 30, 2012 as compared to the quarter ended September 30, 2011.

The following table summarizes our oil and natural gas production and related pricing for the three months ended September 30, 2012, as compared to such data for the three months ended September 30, 2011:

	Three Months Ended September 30,
	2012		2011
Oil production volumes (MBbls)	579		545
Gas production volumes (MMcf)	315		196
Liquid production volumes (MGal)	996		505
Oil equivalents (Mboe)	655		590
Average oil price (per Bbl)	$	101.17	$	103.50
Average gas price (per Mcf)	$	3.09	$	4.70
Average liquids price (per gallon)	$	0.88	$	1.29
Oil equivalents (per Boe)	$	92.24	$	98.32

Lease Operating Expenses. Lease operating expenses, or LOE, not including production taxes increased to $6,638,000 for the three months ended September 30, 2012 from $5,744,000 for the same period in 2011. This increase is primarily the result of an increase in expenses related to contract labor, compressor rental, property taxes and insurance.

Production Taxes. Production taxes increased to $7,070,000 for the three months ended September 30, 2012 from $6,281,000 for the same period in 2011. This increase was primarily related to an 11% increase in production, partially offset by a 6% decrease in the average realized BOE price received, resulting in a 4% increase in oil and gas revenues.

Depreciation, Depletion and Amortization. Depreciation, depletion and amortization, or DD&A, expense increased to $25,377,000 for the three months ended September 30, 2012, and consisted of $25,235,000 in depletion on oil and natural gas properties and $142,000 in depreciation of other property and equipment, as compared to total DD&A expense of $14,736,000 for the three months ended September 30, 2011. This increase was due to an increase in our full cost pool as a result of our capital activities and an increase in our production and a decrease in our total proved reserves volume used to calculate our total DD&A expense.

General and Administrative Expenses. Net general and administrative expenses increased to $3,098,000 for the three months ended September 30, 2012 from $2,034,000 for the same period in 2011. This $1,064,000 increase was due primarily to an increase in franchise taxes and corporate fees as well as increases in salaries, stock compensation and benefits resulting from an increase in the number of employees primarily attributable to our activities in the Utica Shale, partially offset by an increase in administrative services reimbursements under the acquisition team agreement relating to the Utica acreage and an increase in general and administrative costs related to exploration and development activity capitalized to the full cost pool.

Accretion Expense. Accretion expense increased slightly to $176,000 for the three months ended September 30, 2012 from $168,000 for the same period in 2011.

Interest Expense. Interest expense increased to $1,003,000 for the three months ended September 30, 2012 from $225,000 for the same period in 2011 due to an increase in total weighted debt outstanding under our revolving credit facility. Total weighted debt outstanding was $108,848,000 for the three months ended September 30, 2012, as compared to $6,522,000 for the same period in 2011. We had $141,000,000 of total debt outstanding under our revolving credit facility as of September 30, 2012. As of September 30, 2012, amounts borrowed under our revolving credit facility bore interest at the Eurodollar rate of 2.98%.

Income Taxes. As of September 30, 2012, we had an available federal net operating loss carry forward of approximately $50,426,000 from prior years, in addition to numerous temporary differences, which gave rise to deferred tax assets and deferred tax liabilities. Periodically, management performs a forecast of our taxable income to determine whether it is more likely than not that a valuation allowance is needed, looking at both positive and negative factors. A valuation allowance for our deferred tax assets is established if, in management’s opinion, it is more likely than not that some portion will not be realized. At September 30, 2012, a valuation allowance of $3,355,000 had been provided for state net operating losses

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based upon the latest taxable income forecast. We recognized $15,514,000 of deferred income tax expense for the three months ended September 30, 2012 based upon the latest taxable income forecast that includes the affects of the contribution of our Permian Basin assets to Diamondback.

Comparison of the Nine Months Ended September 30, 2012 and 2011

We reported net income of $52,488,000 for the nine months ended September 30, 2012, as compared to $77,448,000 for the nine months ended September 30, 2011. This 32% decrease in period-to-period net income was due primarily to $15,514,000 of deferred income tax expense, a 21% increase in lease operating expenses, a 51% increase in general and administrative expenses and a 21% increase in production taxes for the nine months ended September 30, 2012 as compared to the nine months ended September 30, 2011, partially offset by an 18% increase in net production to 1,964,000 BOE and a 2% increase in realized BOE prices to $97.82 for the nine months ended September 30, 2012 from $95.76 for the same period in 2011.

Oil and Gas Revenues. For the nine months ended September 30, 2012, we reported oil and natural gas revenues of $192,134,000 as compared to oil and natural gas revenues of $160,060,000 during the same period in 2011. This $32,074,000, or 20%, increase in revenues is primarily attributable to an 18% increase in net production to 1,964,000 BOE from 1,671,000 BOE and a 2% increase in realized BOE prices to $97.82 from $95.76 for the nine months ended September 30, 2012 as compared to the nine months ended September 30, 2011.

The following table summarizes our oil and natural gas production and related pricing for the nine months ended September 30, 2012, as compared to such data for the nine months ended September 30, 2011:

	Nine Months Ended September 30,
	2012		2011
Oil production volumes (MBbls)	1,783		1,510
Gas production volumes (MMcf)	741		692
Liquid production volumes (MGal)	2,424		1,933
Oil equivalents (Mboe)	1,964		1,671
Average oil price (per Bbl)	$	105.25	$	102.35
Average gas price (per Mcf)	$	2.87	$	4.56
Average liquids price (per gallon)	$	0.98	$	1.21
Oil equivalents (per Boe)	$	97.82	$	95.76

Lease Operating Expenses. Lease operating expenses, or LOE, not including production taxes increased to $18,201,000 for the nine months ended September 30, 2012 from $15,103,000 for the same period in 2011. This increase is mainly the result of an increase in expenses related to chemicals and fuel, compressor rentals, contract labor, property taxes and overhead.

Production Taxes. Production taxes increased to $22,411,000 for the nine months ended September 30, 2012 from $18,520,000 for the same period in 2011. This increase was primarily related to an 18% increase in production and a 2% increase in the average realized BOE price received resulting in a 20% increase in oil and gas revenues.

Depreciation, Depletion and Amortization. Depreciation, depletion and amortization, or DD&A, expense increased to $70,424,000 for the nine months ended September 30, 2012, and consisted of $70,058,000 in depletion on oil and natural gas properties and $366,000 in depreciation of other property and equipment, as compared to total DD&A expense of $40,606,000 for the nine months ended September 30, 2011. This increase was due to an increase in our full cost pool as a result of our capital activities and an increase in our production used to calculate our total DD&A expense.

General and Administrative Expenses. Net general and administrative expenses increased to $9,370,000 for the nine months ended September 30, 2012 from $6,209,000 for the same period in 2011. This $3,161,000 increase was primarily due to increases in salaries, stock compensation expenses and benefits resulting from an increased number of employees, increases in legal expenses, corporate fees, franchise taxes and bank fees, partially offset by an increase in administrative services

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reimbursements and an increase in general and administrative overhead related to exploration and development activity capitalized to the full cost pool.

Accretion Expense. Accretion expense increased slightly to $529,000 for the nine months ended September 30, 2012 from $491,000 for the same period in 2011.

Interest Expense. Interest expense increased to $1,630,000 for the nine months ended September 30, 2012 from $1,163,000 for the same period in 2011 due to an increase in the average debt outstanding under our revolving credit facility and an increase in the interest rate paid. Total weighted debt outstanding under our facility was $50,529,000 for the nine months ended September 30, 2012 and $25,918,000 for the same period in 2011. As of September 30, 2012, we had $141,000,000 of total debt outstanding under our revolving credit facility. As of September 30, 2012, amounts borrowed under our revolving credit facility bore interest at the Eurodollar rate of 2.98%.

Income Taxes. As of September 30, 2012, we had an available federal net operating loss carry forward of approximately $50,426,000 from prior years, in addition to numerous temporary differences, which gave rise to deferred tax assets and deferred tax liabilities. Periodically, management performs a forecast of our taxable income to determine whether it is more likely than not that a valuation allowance is needed, looking at both positive and negative factors. A valuation allowance for our deferred tax assets is established if, in management’s opinion, it is more likely than not that some portion will not be realized. At September 30, 2012, a valuation allowance of $3,355,000 had been provided for state net operating losses based upon the latest taxable income forecast. We recognized $15,514,000 of deferred income tax expense for the nine months ended September 30, 2012 based upon the latest taxable income forecast that includes the affects of the contribution of our Permian Basin assets to Diamondback.

Liquidity and Capital Resources

Overview. Historically, our primary sources of funds have been cash flow from our producing oil and natural gas properties, borrowings under our bank and other credit facilities and the issuance of equity securities. Our ability to access any of these sources of funds can be significantly impacted by decreases in oil and natural gas prices or oil and natural gas production. During 2011, we received aggregate net proceeds (before offering expenses) of approximately $307.1 million from the sale of shares of our common stock. We did not sell any equity securities during the nine months ended September 30, 2012.

Net cash flow provided by operating activities was $165,876,000 for the nine months ended September 30, 2012, as compared to net cash flow provided by operating activities of $122,046,000 for the same period in 2011. This increase was primarily the result of an increase in cash receipts from our oil and natural gas purchasers due to a 2% increase in net realized prices and an 18% increase in our net BOE production.

Net cash used in investing activities for the nine months ended September 30, 2012 was $387,893,000 as compared to $230,205,000 for the same period in 2011. During the nine months ended September 30, 2012, we spent $269,177,000 in additions to oil and natural gas properties, of which $113,527,000 was spent on our 2012 drilling and recompletion programs, $37,523,000 was spent on expenses attributable to the wells drilled and recompleted during 2011, $8,857,000 was spent on compressors and other facility enhancements, $1,637,000 was spent on plugging costs, $95,851,000 was spent on lease related costs, primarily the acquisition of leases in the Utica Shale, and $3,780,000 was spent on tubulars, with the remainder attributable mainly to capitalized general and administrative expenses. In addition, $93,436,000, $627,000, $3,884,000, $1,000,000, $7,723,000, $7,525,000, $4,132,000, $291,000 and $357,000 was invested in Grizzly, Tatex III, Muskie Holdings LLC, Timber Wolf Terminals LLC, Windsor Midstream LLC, Bison Drilling and Field Services LLC, Stingray Pressure Pumping LLC, Stingray Cementing LLC and Blackhawk Midstream LLC, respectively, during the nine months ended September 30, 2012. During the nine months ended September 30, 2012, we used cash from operations and borrowings under our revolving credit facility for our investing activities.

Net cash provided by financing activities for the nine months ended September 30, 2012 was $140,400,000 as compared to net cash provided by financing activities of $128,402,000 for the same period in 2011. The 2012 amount provided by financing activities is primarily attributable to net borrowings under our secured revolving credit facility. The 2011 amount provided by financing activities is primarily attributable to the net proceeds of $178,676,000 from our equity offerings and exercise of stock options offset by net principal payments of $49,500,000 on borrowings under our secured revolving credit facility.

Credit Facility. On September 30, 2010, we entered into a senior secured revolving credit facility with The Bank of Nova Scotia, as administrative agent and letter of credit issuer and lead arranger, and Amegy Bank National Association, or

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Amegy Bank. The revolving credit facility initially matured on September 30, 2013, had a maximum commitment amount of $100.0 million and had a borrowing base availability of $50.0 million, which was increased to $65.0 million effective December 24, 2010. On May 3, 2011, we entered into a first amendment to the revolving credit facility with The Bank of Nova Scotia, Amegy Bank, KeyBank National Association, or KeyBank, and Société Générale. Pursuant to the terms of the first amendment, KeyBank and Société Générale were added as additional lenders, the maximum amount of the revolving credit facility was increased to $350.0 million, the borrowing base was increased to $90.0 million, certain fees and rates payable by us under the credit facility were decreased, and the maturity date was extended until May 3, 2015. On October 31, 2011, we entered into additional amendments to our revolving credit facility pursuant to which, among other things, the borrowing base under the facility was increased to $125.0 million. On December 14, 2011, we repaid all outstanding borrowings under the credit facility with a portion of the net proceeds of our equity offering completed on December 5, 2011 pending the application of such proceeds to fund our additional Utica Shale lease acquisitions and for general corporate purposes. On May 2, 2012, we entered into an amendment to the revolving credit facility pursuant to which, among other things, the borrowing base was increased to $155.0 million. In addition, Credit Suisse, Deutsche Bank Trust Company Americas and IBERIABANK were added as additional lenders and Société Générale left the bank group. As of September 30, 2012, approximately $141.0 million of indebtedness was outstanding under our revolving credit facility. This facility is secured by substantially all of our assets. Our wholly-owned subsidiaries guarantee our obligations under our revolving credit facility.

On October 9, 2012, we entered into an amendment to our revolving credit facility that modified certain covenants to permit the offering of our 7.750% Senior Notes due 2012, or the Note Offering, described below. The Note Offering closed on October 17, 2012 and we repaid all indebtedness outstanding under our revolving credit facility on that date with a portion of the proceeds from the Note Offering. Effective as of October 17, 2012, we amended our revolving credit facility to lower the applicable rates (i) from a range of 1.00% to 1.75% to a range of 0.75% to 1.50% for the base rate loans and (ii) from a range of 2.00% to 2.75% to a range of 1.75% to 2.50% for the Eurodollar rate loans and letters of credit. This amendment also lowered the commitment fees for Level 1 and Level 2 usage levels, in each case, from 0.50% per annum to 0.375% per annum. Also, effective as of October 17, 2012, in connection with the completion of the Note Offering and the Contribution, our borrowing base under the credit facility was reduced to $45.0 million until the next borrowing base redetermination.

Advances under our revolving credit facility, as amended, may be in the form of either base rate loans or Eurodollar loans. The interest rate for base rate loans is equal to (1) the applicable rate, which ranges from .75% to 1.50%, plus (2) the highest of: (a) the federal funds rate plus 0.5%, (b) the rate of interest in effect for such day as publicly announced from time to time by agent as its “prime rate,” and (c) the Eurodollar rate for an interest period of one month plus 1.00%. The interest rate for Eurodollar loans is equal to (1) the applicable rate, which ranges from 1.75% to 2.50%, plus (2) the London interbank offered rate that appears on Reuters Screen LIBOR01 Page for deposits in U.S. dollars, or, if such rate is not available, the offered rate on such other page or service that displays the average British Bankers Association Interest Settlement Rate for deposits in U.S. dollars, or, if such rate is not available, the average quotations for three major New York money center banks of whom the agent shall inquire as the “London Interbank Offered Rate” for deposits in U.S. dollars. As of September 30, 2012, amounts borrowed under our revolving credit facility bore interest at the Eurodollar rate (2.98%) per annum.

Our revolving credit facility contains customary negative covenants including, but not limited to, restrictions on our and our subsidiaries’ ability to: incur indebtedness; grant liens; pay dividends and make other restricted payments; make investments; make fundamental changes; enter into swap contracts and forward sales contracts; dispose of assets; change the nature of their business; and enter into transactions with their affiliates. The negative covenants are subject to certain exceptions as specified in the credit facility. The credit facility also contains certain affirmative covenants, including, but not limited to the following financial covenants: (1) the ratio of funded debt to EBITDAX (net income, excluding any non-cash revenue or expense associated with swap contracts resulting from ASC 815, plus without duplication and to the extent deducted from revenues in determining net income, the sum of (a) the aggregate amount of consolidated interest expense for such period, (b) the aggregate amount of income, franchise, capital or similar tax expense (other than ad valorem taxes) for such period, (c) all amounts attributable to depletion, depreciation, amortization and asset or goodwill impairment or writedown for such period, (d) all other non-cash charges, (e) non-cash losses from minority investments, (f) actual cash distributions received from minority investments, (g) to the extent actually reimbursed by insurance, expenses with respect to liability on casualty events or business interruption, and (h) all reasonable transaction expenses related to dispositions and acquisitions of assets, investments and debt and equity offerings, and less non-cash income attributable to equity income from minority investments) for a twelve-month period may not be greater than 2.00 to 1.00; and (2) the ratio of EBITDAX to interest expense for a twelve-month period may not be less than 3.00 to 1.00. We were in compliance with these financial covenants at September 30, 2012.

Senior Notes Due 2020. On October 17, 2012, we issued $250.0 million in aggregate principal amount of 7.750% Senior Notes due 2020, or the Notes, to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act under an indenture among us, our subsidiary guarantors and Wells Fargo Bank, National Association, as the trustee. Pursuant to the indenture, interest on the Notes will

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accrue at a rate of 7.750% per annum on the outstanding principal amount from October 17, 2012, payable semi-annually on May 1 and November 1 of each year, commencing on May 1, 2013.

The Notes are our senior unsecured obligations and rank equally in the right of payment with all of our other senior indebtedness and senior in right of payment to any of our future subordinated indebtedness. All of our existing and future restricted subsidiaries that guarantee our secured revolving credit facility or certain other debt guarantee the Notes, provided, however, that the Notes are not guaranteed by Grizzly Holdings, Inc. and will not be guaranteed by any of our future unrestricted subsidiaries. The guarantees rank equally in the right of payment with all of the senior indebtedness of the subsidiary guarantors and senior in the right of payment to any future subordinated indebtedness of the subsidiary guarantors. The Notes and the guarantees are effectively subordinated to all of our and the subsidiary guarantors' secured indebtedness (including all borrowings and other obligations under our revolving credit facility) to the extent of the value of the collateral securing such indebtedness, and structurally subordinated to all indebtedness and other liabilities of any of our subsidiaries that do not guarantee the Notes.

We may redeem some or all of the Notes at any time on or after November 1, 2016, at the redemption prices listed in the indenture. Prior to November 1, 2016, we may redeem the Notes at a price equal to 100% of the principal amount plus a “make-whole” premium. In addition, prior to November 1, 2015, we may redeem up to 35% of the aggregate principal amount of the Notes with the net proceeds of certain equity offerings, provided that at least 65% of the aggregate principal amount of the Notes initially issued remains outstanding immediately after such redemption.

If we experience a change of control (as defined in the indenture), we will be required to make an offer to repurchase the Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase. If we sell certain assets and fail to use the proceeds in a manner specified in the indenture, we will be required to use the remaining proceeds to make an offer to repurchase the Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase.

The indenture contains certain covenants that, subject to certain exceptions and qualifications, among other things, limit our ability and the ability of our restricted subsidiaries to incur or guarantee additional indebtedness, make certain investments, declare or pay dividends or make distributions on capital stock, prepay subordinated indebtedness, sell assets including capital stock of restricted subsidiaries, agree to payment restrictions affecting our restricted subsidiaries, consolidate, merge, sell or otherwise dispose of all or substantially all of our assets, enter into transactions with affiliates, incur liens, engage in business other than the oil and gas business and designate certain of our subsidiaries as unrestricted subsidiaries.

On October 17, 2012, we repaid all outstanding indebtedness under our revolving credit facility with a portion of the net proceeds from the Note Offering. We intend to use the remaining net proceeds for general corporate purposes, including the funding of a portion of our 2012 and 2013 capital development plans.

Building Loans. In June 2004, we purchased the office building we occupy in Oklahoma City, Oklahoma, for $3.7 million. One loan associated with this building matured in March 2006 and bore interest at the rate of 6% per annum, while a second loan was scheduled to mature in June 2011. We entered into a new building loan in March 2011 to refinance the $2.4 million outstanding at that time. The new agreement extended the maturity date of the building loan to February 2016 and reduced the interest rate from 6.5% per annum to 5.82% per annum. The new building loan requires monthly interest and principal payments of approximately $22,000 and is collateralized by the Oklahoma City office building and associated land. As of September 30, 2012, approximately $2.2 million was outstanding on this loan.

Capital Expenditures. Our recent capital commitments have been primarily for the execution of our drilling programs, for acquisitions primarily in the Permian Basin, the Niobrara Formation and Utica Shale, and to fund Grizzly’s delineation drilling program and initial preparation of the Algar Lake facility. Our strategy is to continue to (1) increase cash flow generated from our operations by undertaking new drilling, workover, sidetrack and recompletion projects to exploit our existing properties, subject to economic and industry conditions, and (2) pursue acquisition and disposition opportunities.

Of our net reserves at December 31, 2011, 56% were categorized as proved undeveloped. Our proved reserves will generally decline as reserves are depleted, except to the extent that we conduct successful exploration or development activities or acquire properties containing proved developed reserves, or both. To realize reserves and increase production, we must continue our exploratory drilling, undertake other replacement activities or use third parties to accomplish those activities.

As discussed above under “—Contribution”, on October 11, 2012, we contributed to Diamondback, prior to the closing of the Diamondback IPO, all of our oil and gas interests in the Permian Basin. At the closing of the Contriubtion, Diamondback issued to us (i) 7,914,036 shares of Diamondback common stock and (ii) a promissory note for $63.6 million,

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which was repaid to us at the closing of the Diamondback IPO on October 17, 2012. This aggregate consideration is subject to a post-closing cash adjustment based on changes in the working capital, long-term debt and other items of Windsor Permian referred to in the contribution agreement as of the date of the Contribution. As of October 23, 2012, following the closing of the Diamondback IPO and the underwriters' exercise in full of their option to purchase additional shares of common stock of Diamondback, we owned approximately 21.4% of Diamondback's outstanding common stock. This decrease in total proved reserves contributed to a reduction in our borrowing base available under our revolving credit facility. See “-Credit Facility” above.

At December 31, 2011, our booked inventory of prospects included approximately 24 drilling locations at WCBB. The drilling schedule used in our December 31, 2011 reserve report anticipates that all of those wells will be drilled by 2015. From January 1, 2012 through November 1, 2012, we recompleted 49 existing wells and spud 29 new wells at our WCBB field, of which 24 were completed as producers, two were non-productive, and at November 1, 2012, two were waiting on completion and one was being drilled. We currently intend to recomplete 60 wells and drill 30 new wells during 2012. Our aggregate drilling and recompletion expenditures for our WCBB field during 2012 are estimated to be approximately $50.0 million to $52.0 million.

From January 1, 2012 through November 1, 2012, we recompleted 26 existing wells and spud 21 new wells at our East Hackberry field, of which 15 were completed as producers, three were non-productive, and at November 1, 2012, one was waiting on completion and two were being drilled. We currently intend to drill 22 wells and recomplete 26 wells in our East Hackberry field in 2012. Total capital expenditures for our East Hackberry field during 2012 are estimated to be approximately $53.0 million to $55.0 million.

From January 1, 2012 through October 11, 2012, 19 gross (8.3 net) wells were spud on our Permian Basin acreage, all of which were completed as producers. One gross (0.3 net) existing well was recompleted between January 1, 2012 and October 11, 2012. As discussed above under the heading “-Contribution”, on October 11, 2012, we contributed all of our oil and gas interests in the Permian Basin to Diamondback. We currently anticipate that our capital requirements relating to our Permian Basin acreage during 2012 through the Contribution on October 11, 2012 will be approximately $29.0 million. We will have no further funding obligations for operations relating to this Permian Basin acreage conducted after October 11, 2012.

In the Niobrara Formation in northwestern Colorado, in 2011, we completed a 60 square mile 3-D seismic survey and have received a processed version of the seismic data. From January 1, 2012 through November 1, 2012, three gross (1.0 net) wells were spud on our Niobrara Formation acreage, two of which were completed as producers and one was non-productive. We currently anticipate that our total capital expenditures in the Niobrara Formation will be approximately $2.5 million to $3.0 million in 2012 to drill two gross wells. Our net interest in each of these wells will be less than 50%.

In the Utica Shale in Ohio, in 2011 and through September 30, 2012, we acquired approximately 128,000 gross (64,000 net) acres for $205.8 million. As of November 1, 2012, we had spud 12 wells on our Utica Shale acreage. Our total lease acquisition costs in the Utica Shale during 2012 are estimated to be $112.0 million to $115.0 million, of which approximately $87.8 million was spent through September 30, 2012. In addition, during 2012, we currently anticipate spending $55.0 million to $60.0 million to drill 15 to 17 gross (7.5 to 8.5 net) wells, of which we expect ten gross (five net) to be completed by year end.

During the third quarter of 2006, we purchased a 24.9% interest in Grizzly. As of September 30, 2012, our net investment in Grizzly was approximately $165.0 million. Our capital requirements in 2012 for Grizzly are estimated to be approximately $40.0 million to $43.0 million, primarily for the expenses associated with the construction of the Algar Lake facility and drilling activity during the 2011-2012 winter drilling season. In addition, in February 2012, Grizzly purchased approximately 47,000 acres of oil sands leases in the Athabasca oil sands area for $225.0 million CAD. Our capital contribution obligation to Grizzly for our portion of the purchase price was approximately $56.3 million. We funded this amount with borrowings under our revolving credit facility. Effective October 5, 2012, Grizzly entered into a $125.0 million revolving credit facility, of which $75.0 million is initially available for borrowing to fund additional infrastructure relating to the Algar Lake facility and other future development projects. As of that same date, we entered into an agreement with Grizzly in which we committed to make monthly payments from October 2012 to May 2013 in the aggregate amount of approximately $8.5 million to fund the construction and development of the Algar Lake facility. We also agreed to fund our proportionate share of any unfunded cost overruns in excess of $2.0 million

We do not anticipate any capital expenditures in 2012 related to our interests in Thailand.

Our total capital expenditures for our 2012 drilling activities described above are currently estimated to be in the range of $229.5 million to $242.0 million, of which approximately $174.9 million was spent in the first nine months of 2012. This

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range for 2012 is up from the $130.0 million spent on 2011 activities due to improved commodity pricing and cost environment.

In an effort to facilitate the development of our Utica Shale and other domestic acreage, we have invested in entities that can provide services that are required to support our operations. In the second quarter of 2012, we

acquired a 50% equity interest in each of Stingray Pressure Pumping LLC, or Stingray Pressure, and Stingray Cementing LLC, or Stingray Cementing. Stingray Pressure and Stingray Cementing will provide well completion services. We also acquired a 50% equity interest in Blackhawk Midstream LLC, or Blackhawk, which coordinates gathering, compression, processing and marketing activities in connection with the development of our Utica Shale acreage. In March 2012, we acquired a 50% equity interest in Timber Wolf Terminals LLC, or Timber Wolf, for $1.0 million. Timber Wolf will operate a crude/condensate terminal and sand transloading facility in Ohio. Also in March 2012, we acquired a 22.5% equity interest in Windsor Midstream LLC, or Midstream, for $7.0 million. Midstream owns a 28.4% equity interest in a gas processing plant in West Texas. In 2011, we acquired a 25% equity interest in Bison Drilling and Field Services LLC, or Bison, which owns and operates drilling rigs and related equipment. In April 2012, we purchased an additional 15% equity interest for approximately $6.2 million, bringing our total ownership interest in Bison to 40%. Also in 2011, we acquired a 25% interest in Muskie Holdings LLC, or Muskie, which is engaged in the mining of hydraulic fracturing grade sand. The remaining equity interests in these entities are owned by affiliates of Wexford. In 2012, we expect to invest approximately $30.0 million to $35.0 million in these entities.

We currently estimate that our capital expenditures for our 2013 drilling activities will be in the range of $283.0 million to $299.0 million excluding potential capital expenditures relating to Grizzly beyond those contemplated by our funding agreement described above. We intend to continue to monitor pricing and cost developments and make adjustments to our future capital expenditure programs as warranted.

We believe that our cash on hand, cash flow from operations, proceeds from the Note Offering and the Contribution and borrowings under our revolving credit facility will be sufficient to meet our normal recurring operating needs and capital requirements for the next twelve months. In the event we elect to further expand or accelerate our drilling programs, pursue additional acquisitions or accelerate our Canadian oil sands project or Blackhawk elects to exercise its option to acquire up to a 40% ownership interest in certain midstream operations relating to our Utica acreage, we may be required to obtain additional funds which we would seek to do through traditional borrowings, offerings of debt or equity securities or other means, including the sale of assets. We regularly evaluate new acquisition opportunities. Needed capital may not be available to us on acceptable terms or at all. If we are unable to obtain funds when needed or on acceptable terms, we may be required to delay or curtail implementation of our business plan or not be able to complete acquisitions that may be favorable to us.

Commodity Price Risk

The volatility of the energy markets makes it extremely difficult to predict future oil and natural gas price movements with any certainty. For example, during the past five years, the West Texas Intermediate posted price for crude oil has ranged from a low of $30.28 per barrel in December 2008 to a high of $145.31 per barrel in July 2008. The Henry Hub spot market price of natural gas has ranged from a low of $1.83 per million British thermal units, or MMBtu, in September 2009 to a high of $13.31 per MMBtu in July 2008. On October 31, 2012, the West Texas Intermediate posted price for crude oil was $86.24per barrel and the Henry Hub spot market price of natural gas was $3.69 per MMBtu. Any substantial decline in the price of oil and natural gas will likely have a material adverse effect on our operations, financial condition and level of expenditures for the development of our oil and natural gas reserves, and may result in write downs of oil and natural gas properties due to ceiling test limitations.

To mitigate the effects of commodity price fluctuations, in November 2010, we entered into fixed price swaps for 2,000 barrels of oil per day at a weighted average price of $86.96 per barrel for the period January 2011 through December 2011. For January 2012 through February 2012, we entered into fixed price swaps for 2,000 barrels of oil per day at a weighted average price of $108.00 per barrel. For the period from March 2012 through July 2012, we entered into fixed price swaps for 3,000 barrels of oil per day at a weighted average price of $109.73 per barrel. For the period from August 2012 through December 2012, we entered into fixed price swaps for 4,000 barrels of oil per day at a weighted average price of $107.29. For the period from January 2013 through June 2013, we entered into fixed price swaps for 4,000 barrels of oil per day at a weighted average price of $103.33 per barrel. For the period from July 2013 through December 2013, we entered into fixed price swaps for 3,000 barrels of oil per day at a weighted average price of $100.04. Under the 2011 contracts, we hedged approximately 31% of our 2011 production. Under the 2012 contracts, we have hedged approximately 43% to 44% of our

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estimated 2012 production. Such arrangements may expose us to risk of financial loss in certain circumstances, including instances where production is less than expected or oil prices increase. These fixed price swaps are accounted for as cash flow hedges and recorded at fair value pursuant to FASB ASC 815 and related pronouncements.

Commitments

In connection with the acquisition in 1997 of the remaining 50% interest in the WCBB properties, we assumed the seller’s (Chevron) obligation to contribute approximately $18,000 per month through March 2004, to a plugging and abandonment trust and the obligation to plug a minimum of 20 wells per year for 20 years commencing March 11, 1997. Chevron retained a security interest in production from these properties until abandonment obligations to Chevron have been fulfilled. Beginning in 2009, we can access the trust for use in plugging and abandonment charges associated with the property. As of September 30, 2012, the plugging and abandonment trust totaled approximately $3.1 million. At September 30, 2012, we have plugged 354 wells at WCBB since we began our plugging program in 1997, which management believes fulfills our current minimum plugging obligation.

New Accounting Pronouncements

In May 2011, the FASB issued Accounting Standards Update No. 2011-04, “Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS,” which provides amendments to FASB ASC Topic 820, “Fair Value Measurements and Disclosure,” or FASB ASC 820. The purpose of the amendments in this update is to create common fair value measurement and disclosure requirements between GAAP and IFRS. The amendments change certain fair value measurement principles and enhance the disclosure requirements. The amendments to FASB ASC 820 are effective for interim and annual periods beginning after December 15, 2011. The adoption did not have a material impact on our consolidated financial statements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-05, “Comprehensive Income: Presentation of Comprehensive Income,” which provides amendments to FASB ASC Topic 220, “Comprehensive Income,” or FASB ASC 220. The purpose of the amendments in this update is to provide a more consistent method of presenting non-owner transactions that affect an entity’s equity. The amendments eliminate the option to report other comprehensive income and its components in the statement of changes in stockholders’ equity and require an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. The amendments to FASB ASC 220 are effective for interim and annual periods beginning after December 15, 2011 and should be applied retrospectively. The components of other comprehensive income and total comprehensive income are presented in the accompanying consolidated statements of comprehensive income (loss).

ITEM 3. QUALITATIVE AND QUANTITATIVE DISCLOSURES ABOUT MARKET RISK.

Our revenues, operating results, profitability, future rate of growth and the carrying value of our oil and natural gas properties depend primarily upon the prevailing prices for oil and natural gas. Historically, oil and natural gas prices have been volatile and are subject to fluctuations in response to changes in supply and demand, market uncertainty and a variety of additional factors, including: worldwide and domestic supplies of oil and natural gas; the level of prices, and expectations about future prices, of oil and natural gas; the cost of exploring for, developing, producing and delivering oil and natural gas; the expected rates of declining current production; weather conditions, including hurricanes, that can affect oil and natural gas operations over a wide area; the level of consumer demand; the price and availability of alternative fuels; technical advances affecting energy consumption; risks associated with operating drilling rigs; the availability of pipeline capacity; the price and level of foreign imports; domestic and foreign governmental regulations and taxes; the ability of the members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls; political instability or armed conflict in oil and natural gas producing regions; and the overall economic environment.

These factors and the volatility of the energy markets make it extremely difficult to predict future oil and natural gas price movements with any certainty. For example, during the past five years, the West Texas Intermediate posted price for crude oil has ranged from a low of $30.28 per barrel, in December 2008 to a high of $145.31 per barrel in July 2008. The Henry Hub spot market price of natural gas has ranged from a low of $1.83 per MMBtu, in September 2009 to a high of $13.31 per MMBtu in July 2008. On October 31, 2012, the West Texas Intermediate posted price for crude oil was $86.24 per barrel and the Henry Hub spot market price of natural gas was $3.69 per MMBtu. Any substantial decline in the price of oil and natural gas will likely have a material adverse effect on our operations, financial condition and level of expenditures for the development of our oil and natural gas reserves, and may result in write downs of oil and natural gas properties due to ceiling test limitations.

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To mitigate the effects of commodity price fluctuations, in November 2010, we entered into fixed price swaps for 2,000 barrels of oil per day at a weighted average price of $86.96 per barrel for the period January 2011 through December 2011. For January 2012 through February 2012, we entered into fixed price swaps for 2,000 barrels of oil per day at a weighted average price of $108.00 per barrel. For the period from March 2012 through July 2012, we entered into fixed price swaps for 3,000 barrels of oil per day at a weighted average price of $109.73 per barrel. For the period from August 2012 through December 2012, we entered into fixed price swaps for 4,000 barrels of oil per day at a weighted average price of $107.29. For the period from January 2013 through June 2013, we entered into fixed price swaps for 4,000 barrels of oil per day at a weighted average price of $103.33 per barrel. For the period from July 2013 through December 2013, we entered into fixed price swaps for 3,000 barrels of oil per day at a weighted average price of $100.04. Under the 2011 contracts, we hedged approximately 31% of our 2011 production. Under the 2012 contracts, we have hedged approximately 43% to 44% of our estimated 2012 production. Such arrangements may expose us to risk of financial loss in certain circumstances, including instances where production is less than expected or oil prices increase. These fixed price swaps are accounted for as cash flow hedges and recorded at fair value pursuant to FASB ASC 815 and related pronouncements. At September 30, 2012, we had a net liability derivative position of $9.5 million as compared to a net asset derivative position of $8.7 million as of September 30, 2011, related to our fixed price swaps. Utilizing actual derivative contractual volumes, a 10% increase in underlying commodity prices would have reduced the fair value of these instruments by approximately $17.9 million, while a 10% decrease in underlying commodity prices would have increased the fair value of these instruments by $17.9 million. However, any realized derivative gain or loss would be substantially offset by a decrease or increase, respectively, in the actual sales value of production covered by the derivative instrument.

Our revolving credit facility is structured under floating rate terms, as advances under this facility may be in the form of either base rate loans or Eurodollar loans. As such, our interest expense is sensitive to fluctuations in the prime rates in the U.S. or, if the Eurodollar rates are elected, the Eurodollar rates. At September 30, 2012, amounts borrowed under our revolving credit facility bore interest at the Eurodollar rate of 2.98%. A 1% increase in interest rates would increase interest expense by approximately $1,410,000 per year, based on $141.0 million outstanding under our revolving credit facility as of September 30, 2012. As of September 30, 2012, we did not have any interest rate swaps to hedge our interest risks.

ITEM 4. CONTROLS AND PROCEDURES

Evaluation of Disclosure Control and Procedures. Under the direction of our Chief Executive Officer and Vice President and Chief Financial Officer, we have established disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. The disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer and Vice President and Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

As of September 30, 2012, an evaluation was performed under the supervision and with the participation of management, including our Chief Executive Officer and Vice President and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act. Based upon our evaluation, our Chief Executive Officer and Vice President and Chief Financial Officer have concluded that as of September 30, 2012, our disclosure controls and procedures are effective.

Changes in Internal Control over Financial Reporting. There have not been any changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

PART II. OTHER INFORMATION

ITEM 1. LEGAL PROCEEDINGS

The Louisiana Department of Revenue, or LDR, is disputing our severance tax payments to the State of Louisiana from the sale of oil under fixed price contracts during the years 2005 through 2007. The LDR maintains that we paid approximately $1.8 million less in severance taxes under fixed price terms than the severance taxes we would have had to pay had we paid severance taxes on the oil at the contracted market rates only. We have denied any liability to the LDR for underpayment of severance taxes and have maintained that we were entitled to enter into the fixed price contracts with unrelated third parties and pay severance taxes based upon the proceeds received under those contracts. We have maintained our right to contest any final assessment or suit for collection if brought by the State. On April 20, 2009, the LDR filed a lawsuit in the 15th Judicial District Court, Lafayette Parish, in Louisiana against our company seeking $2,275,729 in severance

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taxes, plus interest and court costs. We filed a response denying any liability to the LDR for underpayment of severance taxes and are defending our company in the lawsuit. The LDR had taken no further action on this lawsuit since filing its petition until recently when it propounded discovery requests to which we have responded. Since we served discovery requests on the LDR and received the LDR’s responses, there has been no further activity on the case and no trial date has been set.

In December 2010, the LDR filed two identical lawsuits against us in different venues to recover allegedly underpaid severance taxes on crude oil for the period January 1, 2007 through December 31, 2010, together with a claim for attorney’s fees. The petitions do not make any specific claim for damages or unpaid taxes. As with the first lawsuit filed by the LDR in 2009, we have denied all liability and will vigorously defend the lawsuit. The cases are in the very early stages, and we have not yet filed a response to these lawsuits. Recently, the LDR filed motions to stay the lawsuits before we filed any responsive pleadings. The LDR has advised us that it intends to pursue settlement discussions with us and other similarly situated defendants in separate proceedings, but has taken no action to initiate settlement talks. There has been no activity on either of these lawsuits for more than a year.

In November 2006, Cudd Pressure Control, Inc., or Cudd, filed a lawsuit against us, Great White Pressure Control LLC, or Great White, and six former Cudd employees in the 129th Judicial District Harris County, Texas. The lawsuit was subsequently removed to the United States District Court for the Southern District of Texas (Houston Division). The lawsuit alleged RICO violations and several other causes of action relating to Great White's employment of the former Cudd employees and sought unspecified monetary damages and injunctive relief. On stipulation by the parties, the plaintiff's RICO claim was dismissed without prejudice by order of the court on February 14, 2007. We filed a motion for summary judgment on October 5, 2007. The Court entered a final interlocutory judgment in favor of all defendants, including us, on April 8, 2008. On November 3, 2008, Cudd filed its appeal with the U.S. Court of Appeals for the Fifth Circuit. The Fifth Circuit vacated the district court decision finding, among other things, that the district court should not have entered summary judgment without first allowing more discovery. The case was remanded to the district court, and Cudd filed a motion to remand the case to the original state court, which motion was granted. Cudd subsequently filed amended petitions with the state court (a) alleging, among other things, that we conspired with the other defendants to misappropriate, and misappropriated Cudd's trade secrets and caused its employees to breach their fiduciary duties, and (b) seeking monetary damages, including $11.8 million as a reasonable royalty for the alleged use of its trade secrets. Cudd also sought disgorgement of the alleged benefits received by the various defendants. Cudd also sought its attorney's fees, which Cudd claimed were not less than $450,000 plus 10% of any final judgment. This case went to trial on September 5, 2012 and on September 28, 2012 the jury rendered its verdict, awarding no damages to the plaintiffs. We along with all defendants filed a Motion for Entry of Judgment that is consistent for with the jury's verdict. Cudd filed an Application for Disgorgement and a Motion for Judgment Notwithstanding the Verdict. The court denied all of Cudd's post-trial motions on October 12, 2012, and the defendants are waiting for the court to enter a judgment consistent for with the jury's verdict. After the entry of the judgment, Cudd is expected to file a motion for new trial and an appeal.

On July 30, 2010, six individuals and one limited liability company sued 15 oil and gas companies in Cameron Parish Louisiana for contamination across the surface of where the defendants operated in an action entitled Reeds et al. v. BP American Production Company et al., 38th Judicial District. No. 10-18714. The plaintiffs’ original petition for damages, which did not name us as a defendant, alleges that the plaintiffs’ property located in Cameron Parish, Louisiana within the Hackberry oil field is contaminated as a result of historic oil and gas exploration and production activities. Plaintiffs allege that the defendants conducted, directed and participated in various oil and gas exploration and production activities on their property which allegedly have contaminated or otherwise caused damage to the property, and have sued the defendants for alleged breaches of oil, gas and mineral leases, as well as for alleged negligence, trespass, failure to warn, strict liability, punitive damages, lease liability, contract liability, unjust enrichment, restoration damages, assessment and response costs and stigma damages. On December 7, 2010, we were served with a copy of the plaintiffs’ first supplemental and amending petition which added four additional plaintiffs and six additional defendants, including us, bringing the total number of defendants to 21. It also increased the total acreage at issue in this litigation from 240 acres to approximately 1,700 acres. In addition to the damages sought in the original petition, the plaintiffs now also seek: damages sufficient to cover the cost of conducting a comprehensive environmental assessment of all present and yet unidentified pollution and contamination of their property; the cost to restore the property to its pre-polluted original condition; damages for mental anguish and annoyance, discomfort and inconvenience caused by the nuisance created by defendants; land loss and subsidence damages and the cost of backfilling canals and other excavations; damages for loss of use of land and lost profits and income; attorney fees and expenses; and damages for evaluation and remediation of any contamination that threatens groundwater. In addition to us, current defendants include ExxonMobil Oil Corporation, Mobil Exploration & Producing North America Inc., Chevron U.S.A. Inc., The Superior Oil Company, Union Oil Company of California, BP America Production Company, Tempest Oil Company, Inc., ConocoPhillips Company, Continental Oil Company, WM. T. Burton Industries, Inc., Freeport Sulphur Company, Eagle Petroleum Company, U.S. Oil of Louisiana, M&S Oil Company, and Empire Land Corporation, Inc. of Delaware. On January 21, 2011, we filed a pleading challenging the legal sufficiency of the petitions on several grounds and requesting that

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they either be dismissed or that plaintiffs be required to amend such petitions. In response to the pleadings filed by us and similar pleadings filed by other defendants, the plaintiffs filed a third amending petition with exhibits which expands the description of the property at issue, attaches numerous aerial photos and identifies the mineral leases at issue. In response, we and numerous defendants re-urged their pleadings challenging the legal sufficiency of the petitions. Some of the defendants’ grounds for challenging the plaintiffs’ petitions were heard by the court on May 25, 2011 and were denied. The court signed the written judgment on December 9, 2011. We noticed our intent to seek supervisory review on December 19, 2011 and the trial court fixed a return date of January 11, 2012 for the filing of the writ application. We filed our supervisory writ, which was denied by the Louisiana Third Circuit Court of Appeal and the Louisiana Supreme Court. We have been active in serving discovery requests and responding to discovery requests from the plaintiffs. It is anticipated that the discovery phase of this case will become more active in the upcoming months. Plaintiffs’ counsel is seeking a trial date in mid-2013.

Due to the early stages of the LDR and Reed litigation, the outcome is uncertain and management cannot determine the amount of loss, if any, that may result. In each case, management has determined the possibility of loss is remote. However, litigation is inherently uncertain. Adverse decisions in one or more of the above matters could have a material adverse affect on our financial condition or results of operations and management cannot determine the amount of loss, if any, that may result.

We have been named as a defendant in various other lawsuits related to our business. In each such case, management has determined that the possibility of loss is remote. The resolution of these matters is not expected to have a material adverse effect on our financial condition or results of operations in future periods.

ITEM 1A. RISK FACTORS.

See risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2011.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

(a) None

(b) Not Applicable.

(c) We do not have a share repurchase program, and during the three months ended September 30, 2012, we did not purchase any shares of our common stock.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES.

Not applicable.

ITEM 5. OTHER INFORMATION

(a)In our Annual Report on Form 10-K for the year ended December 31, 2011 filed with the SEC on February 27, 2012, we reported in Note 20-Supplemental Information on Oil and Gas Exploration and Production Activities on page F-31 the total negative revisions of 4,991 MBOE in our 2011 proved reserves from prior year reserve estimates. Of these revisions, approximately 41% was attributable to the drilling of our proved undeveloped reserves, or PUDs, during 2011, which resulted in one PUD well proving to be nonproductive and certain other PUD wells not having as many productive intervals as had been estimated in our 2010 year-end report based on our historical experience, and approximately 8% was attributable to ethane takeaway issues in our Permian Basin fields relating to the current excess supply of ethane as a result of the increased drilling activity in the Permian Basin. The inability to market the ethane resulted in a lower natural gas liquids yield per well and reduced BOEs for reserve reporting purposes. The balance of the downward revisions in 2011 was primarily attributable to a change in a booking methodology used by our new petroleum engineers in the Permian Basin fields and an adjustment made with respect to our East Hackberry field. Specifically, the 2011 reserve report prepared by Ryder Scott Company, L.P., or Ryder Scott, for our Permian Basin properties assigned PUDs only in close proximity to seasoned production. The prior reports for our Permian Basin properties were prepared by Pinnacle Energy Services, LLC, or Pinnacle, and utilized a methodology consistent with large resource basins where geologic risk is minimal. The methodology utilized by Pinnacle typically results in a greater number of PUD locations than the “close proximity” method used by Ryder Scott. There was also a shift of 469

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MBOE from proved to probable reserves made by Ryder Scott in one prospect area in the Permian Basin where existing well performance declined more quickly than originally projected. Locations in this area were moved to the probable reserve category until more production history is obtained to confirm the economic viability of the area. The downward revisions in 2011 reserves attributable to our East Hackberry field were made by Netherland, Sewell & Associates, Inc. because the well performance for our prior year's drilling program declined more quickly than originally projected.

(b)On November 7, 2012, we entered into employment agreements with each of Mike Liddell, our Chairman of the Board, James D. Palm, our Chief Executive Officer, and Michael G. Moore, our Chief Financial Officer, Vice President and Secretary, each of whom is referred to herein as an Executive. The material terms of each Executive's employment agreement are substantially the same and are summarized below.

Each Executive's employment agreement has an initial term of three years, effective as of November 1, 2012, and automatically renews for successive one-year periods unless notice is given by either party to not extend the term of such agreement at least 90 days prior to the expiration of the then-current term. The annual base salary of each Executive under his employment agreement is $300,000, which amount may be increased, but not decreased, by our board of directors or our compensation committee. In addition, each Executive will be eligible to receive during each calendar year a discretionary cash bonus, or to participate in any cash incentive plan of ours then in existence and to receive an annual cash performance bonus; provided that the minimum annual bonus payable to each Executive in each contract year shall not be less than $500,000. The amount of each Executive's annual bonus and any target performance goals under a cash incentive plan shall be determined by our compensation committee. In addition, for each fiscal year ending during an Executive's employment term, such Executive will be eligible to participate in our stock incentive plan and may, in the discretion of our compensation committee, receive an equity award in accordance with the terms of such plan. The timing, amount, performance targets, if any, vesting schedule and any other terms applicable to any such equity award will be determined by our compensation committee. Each Executive will be entitled to certain other benefits, including (i) up to four weeks of vacation each calendar year, (ii) the ability to participate in all of our group health and retirement plans then in effect and (iii) in the case of Messrs. Palm and Moore, the use of an automobile provided by us.

If an Executive's employment is terminated (i) by us other than for “cause,” (ii) by such Executive for “good reason” or (iii) as a result of such Executive's death or disability, then, among other things: (A) we shall provide such Executive with (x) a lump sum payment equal to all accrued but unpaid salary and other compensation payable to such Executive with respect to services rendered through the date of termination (including a pro rata portion of such Executive's minimum annual bonus for the then-current year) and all accrued and unpaid vacation and sick pay and (y) a lump sum payment equal to the amount such Executive would have earned on account of his base salary and minimum annual bonus during the two-year period following the date of his termination had his employment not been terminated, subject to certain adjustments; and (B) all restricted stock, restricted stock units, stock options and stock appreciation rights granted to such Executive that would have vested during the three-year period following the date of his termination solely as a result of such Executive's continued employment will vest immediately on the date of termination. If an Executive's employment is terminated by us for “cause” or by such Executive voluntarily other than for “good reason,” then such Executive will be entitled to receive a lump sum payment equal to all accrued but unpaid salary and other compensation payable to such Executive with respect to services rendered through the date of termination (including a pro rata portion of such Executive's minimum annual bonus for the then-current year).

If, within two years of a “change of control” of our company, an Executive's employment is terminated (i) by us other than for “cause,” (ii) by such Executive for “good reason” or (iii) as a result of such Executive's death or disability, then, in addition to the benefits described in the previous paragraph, all restricted stock, restricted stock units, stock options and stock appreciation rights granted to such Executive that would have vested at any time thereafter solely as a result of such Executive's continued employment will vest immediately on the date of termination.

The foregoing description of the employment agreements of the Executives is qualified in its entirety by reference to the full texts of such agreements, which are filed as Exhibit 10.4, Exhibit 10.5 and Exhibit 10.6 to this Quarterly Report on Form 10-Q and are incorporated by reference herein.

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ITEM 6. EXHIBITS

Exhibit Number	Description
2.1	Purchase Agreement, dated as of October 12, 2012, among Gulfport Energy Corporation, subsidiary guarantors party thereto and Credit Suisse Securities (USA) LLC, as representative of the several initial purchasers (incorporated by reference to Exhibit 1.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on October 17, 2012).
3.1	Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on April 26, 2006).
3.2	Certificate of Amendment No. 1 to Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to Form 10-Q, File No. 000-19514, filed by the Company with the SEC on November 6, 2009).
3.3	Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to Form 8-K, File No. 000-19514, filed by the Company with the SEC on July 12, 2006).
4.1	Form of Common Stock certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the Registration Statement on Form SB-2, File No. 333-115396, filed by the Company with the SEC on July 22, 2004).
4.2	Form of Warrant Agreement (incorporated by reference to Exhibit 10.4 to Amendment No. 2 to the Registration Statement on Form SB-2, File No. 333-115396, filed by the Company with the SEC on July 22, 2004).
4.3	Registration Rights Agreement, dated as of February 23, 2005, by and among the Company, Southpoint Fund LP, a Delaware limited partnership, Southpoint Qualified Fund LP, a Delaware limited partnership and Southpoint Offshore Operating Fund, LP, a Cayman Islands exempted limited partnership (incorporated by reference to Exhibit 10.7 of Form 10-KSB, File No. 000-19514, filed by the Company with the SEC on March 31, 2005).
4.4	Registration Rights Agreement, dated as of March 29, 2002, by and among Gulfport Energy Corporation, Gulfport Funding LLC, certain other affiliates of Wexford and the other Investors Party thereto (incorporated by reference to Exhibit 10.3 of Form 10-QSB, File No. 000-19514, filed by the Company with the SEC on November 11, 2005).
4.5	Amendment No. 1, dated February 14, 2006, to the Registration Rights Agreement, dated as of March 29, 2002, by and among Gulfport Energy Corporation, Gulfport Funding LLC, certain other affiliates of Wexford and the other Investors Party thereto (incorporated by reference to Exhibit 10.15 of Form 10-KSB, File No. 000-19514, filed by the Company with the SEC on March 31, 2006).
4.6	Form of Investor Rights Agreement by and between Diamondback Energy, Inc. and the Company (incorporated by reference to Exhibit 10.2 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on May 8, 2012).
4.7	Indenture, dated as of October 17, 2012, among Gulfport Energy Corporation, subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee (including the form of Gulfport Energy Corporation's 7.750% Senior Note Due November 1, 2020) (incorporated by reference to Exhibit 4.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on October 23, 2012).
4.8	Registration Rights Agreement, dated as of October 17, 2012, among Gulfport Energy Corporation, subsidiary guarantors party thereto and Credit Suisse Securities (USA) LLC, as representative of the several initial purchasers (incorporated by reference to Exhibit 4.2 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on October 23, 2012).
10.1	Fifth Amendment to Credit Agreement, effective as of October 9, 2012, among Gulfport Energy Corporation, as borrower, The Bank of Nova Scotia, as administrative agent and letter of credit issuer and lead arranger, and certain lenders and agents party thereto (incorporated by reference to Exhibit 10.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on October 9, 2012).
10.2	Investor Rights Agreement, dated as of October 11, 2012, between Gulfport Energy Corporation and Diamondback Energy, Inc. (incorporated by reference to Exhibit 10.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on October 17, 2012).

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10.3	Sixth Amendment to Credit Agreement, effective as of October 17, 2012, among Gulfport Energy Corporation, as borrower, The Bank of Nova Scotia, as administrative agent and letter of credit issuer and lead arranger, and certain lenders and agents party thereto (incorporated by reference to Exhibit 10.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on October 23, 2012).
10.4*	Employment Agreement, dated November 7, 2012 between the Company and Mike Liddell.
10.5*	Employment Agreement, dated November 7, 2012 between the Company and James D. Palm.
10.6*	Employment Agreement, dated November 7, 2012 between the Company and Michael G. Moore.
31.1*	Certification of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.2*	Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
32.1*	Certification of Chief Executive Officer of the Registrant pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.
32.2*	Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.
101.INS**	XBRL Instance Document.
101.SCH**	XBRL Taxonomy Extension Schema Document.
101.CAL**	XBRL Taxonomy Extension Calculation Linkbase.
101.DEF**	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB**	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE**	XBRL Taxonomy Extension Presentation Linkbase Document.

* Filed herewith.

** Furnished herewith, not filed.

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SIGNATURES

Pursuant to the requirements of the Securities and Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		GULFPORT ENERGY CORPORATION
Date:	November 8, 2012
		/s/ James D. Palm
		James D. Palm
		Chief Executive Officer
		/s/ Michael G. Moore
		Michael G. Moore
		Chief Financial Officer

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EX-10.4

Exhibit 10.4

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is made and entered into November 7, 2012, by and between Gulfport Energy Corporation, a Delaware corporation (the “Company”), and Mike Liddell, an individual (“Executive”).

RECITALS

WHEREAS, the Company is engaged in the exploration and development of crude oil and natural gas fields and related activities.

WHEREAS, Executive is and has been for some time a principal officer of Company, and is experienced in the management and conduct of the Company’s business.

WHEREAS, the Company desires to continue to employ Executive, and Executive desires to continue be employed by the Company, upon the terms and subject to the conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and the terms, covenants and conditions contained herein, the Company and Executive agree as follows:

1.EMPLOYMENT AND DUTIES.

1.1General. The Company hereby employs Executive, and Executive agrees to serve, as Chairman of the Board of the Company, upon the terms and subject to the conditions set forth herein. Executive shall have all the responsibilities and powers normally associated with such position and Executive shall perform such other duties and responsibilities as may be designated from time to time by the Board of Directors.

1.2Services. Executive shall devote such business time, energy and efforts faithfully and diligently as may be reasonably necessary to promote the Company’s interests. The terms of this Section 1 shall not prevent Executive from investing or otherwise managing his assets in such form or manner as he chooses and spending such time, whether or not during business hours, as he deems necessary to manage his investments, so long as he is able to fulfill his duties pursuant to Section 1.1 above.

2.TERM.

Subject to the provisions for termination provided in Section 5, the term of Executive’s employment under this Agreement shall commence as of November 1, 2012 (the “Effective Date”) and shall terminate on the third anniversary of the Effective Date (the “Initial Period”); provided, however, that unless either party shall give written notice to the other party of an election not to

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extend or renew Executive’s employment hereunder at least ninety (90) days prior to the end of the Initial Period, or any anniversary thereof, the term of this Agreement shall automatically be extended by successive one-year periods (each an “Extension”). The term of this Agreement, including the Initial Period and any Extension, is hereinafter referred to as the “Employment Term.” Each 12 months period beginning on the Effective Date or any anniversary thereof and ending on the day prior to the anniversary thereof is hereinafter referred to as a “Contract Year.”

3.COMPENSATION.

3.1Base Salary. As compensation for services rendered under this Agreement, the Company shall pay to Executive a base salary (the “Base Salary”) at an annualized rate of $300,000 payable in accordance with the normal payroll procedures of the Company. From time to time at the sole discretion of the Compensation Committee (the “Compensation Committee”) of the Board of Directors of the Company (the “Board of Directors”), Executive’s Base Salary shall be reviewed by the Compensation Committee and/or the Board of Directors and may be increased, but not decreased, by the Compensation Committee or the Board of Directors in their sole discretion. The term “Base Salary” as used herein shall mean and refer to the then current base salary, as adjusted from time to time in accordance with this Section 3.1. The Company shall deduct from the Base Salary amounts sufficient to cover applicable federal, state and/or local income tax withholdings and any other amounts which the Company is required to withhold by applicable law.

3.2Bonuses.

3.2.1Annual Cash Bonus.

3.2.1.1In addition to Base Salary, Executive will be eligible, for each Contract Year during the Employment Term, to receive a discretionary cash bonus as determined by the Compensation Committee, if any, or to participate in any cash incentive plan then in existence and to receive an annual cash performance bonus (an “Annual Cash Bonus”) in accordance with the terms of such plan or plans; provided that the minimum annual bonus for each Contract Year during the Employment Term will not be less than $500,000 (the “Minimum Annual Bonus”). The amount of any such Annual Cash Bonuses (subject to the requirement to pay the Minimum Annual Bonus) and the annual target performance goals under any cash incentive plan that may be adopted during the Employment Term shall be determined by the Compensation Committee, in its sole discretion, and, subject to the Minimum Annual Bonus requirement, may be based on the Company’s fiscal year.

3.2.1.2If Executive’s employment with the Company is terminated (i) by the Company other than for “Cause” (as defined herein), including if the Company provides notice of nonrenewal within 90 days of the end of the Initial Period or any Extension, (ii) by the Executive for Good Reason, or (iii) as a result of Executive’s Death or Disability (as provided in Section 5.1 herein), then Executive (or Executive’s estate, if applicable) will be entitled to a pro-rated portion of the Minimum Annual Bonus based on the Minimum Annual Bonus multiplied by a fraction, the numerator of which will be the number of days in the Contract Year that have elapsed between the beginning of the Contract Year and the date of employment termination and the denominator of which will be the total number of days (365/366) in the Contract Year. The Executive’s right to

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receive payment of any pro-rated Minimum Annual Bonus for the year of termination will be contingent on Executive’s timely execution and delivery to the Company of a general release substantially in the form attached hereto as “Exhibit A” as described in Section 6.1.4 herein and will be subject to payment at the same time as the payments described in Section 6.1.1 that are conditioned upon execution and delivery of a general release.

3.2.2Equity Awards. In addition to the Base Salary, Executive will be eligible, for each fiscal year of the Company ending during the Employment Term, to participate in the Company’s Amended and Restated 2005 Stock Incentive Plan or such other equity incentive plan or plans then in existence for the benefit of employees, and may in the discretion of the Compensation Committee receive an equity award (an “Equity Award”), in accordance with the terms of such plan or plans. The timing and amount of such Equity Awards, any target performance goals and the vesting terms of such awards will be determined by the Compensation Committee in its sole discretion. Except as expressly set forth herein, any Equity Awards are pursuant to and will incorporate all terms and conditions of the Company’s Amended and Restated 2005 Stock Incentive Plan or such other equity incentive plan or plans then in existence for the benefit of employees, as applicable, and the Company’s standard form of award agreement. If Executive’s employment with the Company terminates prior to any scheduled vesting date then, except as expressly provided herein, Executive shall forfeit all rights and interests in and to such unvested Equity Awards.

3.3Benefits.

3.3.1Vacation. Executive shall be entitled to take up to four weeks paid vacation for each calendar year during Executive’s employment; provided, however, that vacation shall only be taken at such times as not to interfere with the necessary performance of Executive’s duties and obligations under this Agreement.

3.3.2Other Benefits; Insurance. During the term of Executive’s employment under this Agreement, if and to the extent eligible, Executive shall be entitled to participate in all Company Group Health Plans then in effect, including, without limitation, any supplemental disability coverage available to similarly situated executive employees. For purposes of this Agreement, “Company Group Health Plans” means all operative medical, dental, group life, disability and accidental death and dismemberment insurance, all on the same basis generally applicable to similarly situated employees of the Company; provided, however, that nothing contained in this Agreement will, in any manner whatsoever, directly or indirectly, require or otherwise prohibit the Company from amending, modifying, curtailing, discontinuing, or otherwise terminating any Company Group Health Plan at any time (whether before or after the date of Executive’s termination). Executive will be eligible to receive life insurance coverage providing a death benefit of not less than $500,000.

3.3.3Retirement Plans. During the term of Executive’s employment under this Agreement, if and to the extent eligible, Executive shall be entitled to participate in all Company Retirement Plans then in effect. For purposes of this Agreement, “Company Retirement Plans” means the Company’s 401(k) Profit Sharing Plan and all operative employee pension benefit plans (tax-qualified and nonqualified plans) that may in the future be sponsored or maintained by the Company, all on the same basis generally applicable to similarly situated employees of the Company;

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provided, however, that nothing contained in this Agreement will, in any manner whatsoever, directly or indirectly, require or otherwise prohibit the Company from amending, modifying, curtailing, discontinuing, or otherwise terminating any Company Retirement Plan at any time (whether before or after the date of Executive’s termination).

3.3.4Reimbursement. Executive shall be entitled to reimbursement from the Company for the reasonable costs and expenses incurred in connection with the performance of the duties and obligations provided for in this Agreement. Reimbursement shall be paid upon prompt presentation of expense statements or vouchers and such other supporting information as the Company may from time to time require.

4.TRADE SECRETS, CONFIDENTIAL INFORMATION AND INVENTIONS.

4.1Trade Secrets. During the course of Executive’s employment, Executive will have access to various trade secrets, confidential information and inventions of Company as defined below.

4.1.3“Confidential Information” means all information and material which is proprietary to the Company, whether or not marked as “confidential” or “proprietary” and which is disclosed to or obtained from the Company by the Executive, which relates to the Company’s past, present or future research, development or business activities. Confidential Information is all information or materials prepared by or for the Company and includes, without limitation, all of the following: designs, drawings, specifications, techniques, models, data, source code, object code, documentation, diagrams, flow charts, research, development, processes, systems, methods, machinery, procedures, “know-how”, new product or new technology information, formulas, patents, patent applications, product prototypes, product copies, cost of production, manufacturing, developing or marketing techniques and materials, cost of production, development or marketing time tables, customer lists, strategies related to customers, suppliers or personnel, contract forms, pricing policies and financial information, volumes of sales, and other information of similar nature, whether or not reduced to writing or other tangible form, and any other Trade Secrets, as defined by Section 4.1.3, or non-public business information.

4.1.4“Inventions” means all discoveries, concepts and ideas, whether patentable or not, including but not limited to, processes, methods, formulas, compositions, techniques, articles and machines, as well as improvements thereof or “know-how” related thereto, relating at the time of conception or reduction to practice to the business engaged in by the Company, or any actual or anticipated research or development by the Company.

4.1.5“Trade Secrets” shall mean any scientific or technical data, information, design, process, procedure, formula or improvement that is commercially available to the Company and is not generally known in the industry.

This Section includes not only information belonging to Company which existed before the date of this Agreement, but also information developed by Executive for Company or its employees during his employment and thereafter.

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4.2Restriction on Use of Confidential Information. Executive agrees that his use of Trade Secrets and other Confidential Information is subject to the following restrictions during the term of the Agreement and for an indefinite period thereafter so long as the Trade Secrets and other Confidential Information have not become generally known to the public.

4.2.5Non-Disclosure. Except as required by the performance of the Executive’s services to the Company under the terms of this Agreement, Executive shall not, directly or indirectly disclose, or permit others to disclose the Company’s Trade Secrets, Confidential Information and/or Inventions as defined above.

4.2.6Return of Company Information. Upon termination of Executive’s employment with Company for any reason, Executive will surrender and return to Company all documents and materials in his possession or control which contain Trade Secrets, Inventions and other Confidential Information. Executive shall immediately return to the Company all lists, books, records, materials and documents, together with all copies thereof, and all other Company property in his possession or under his control, relating to or used in connection with the business of the Company. Executive acknowledges and agrees that all such lists, books, records, materials and documents, are the sole and exclusive property of the Company.

4.2.7Prohibition Against Unfair Competition. At any time after the termination of his employment with Company for any reason, Executive will not engage in competition with Company while making use of the Trade Secrets of Company.

4.3Patents and Inventions. Executive agrees that any Inventions made, conceived or completed by Executive during the term of Executive’s service, solely or jointly with others, which are made with the Company’s equipment, supplies, facilities or Confidential Information, or which relate at the time of conception or reduction to purpose of the Invention to the business of the Company or the Company’s actual or demonstrably anticipated research and development, or which result from any work performed by Executive for the Company, shall be the sole and exclusive property of the Company, and all Trade Secrets, Confidential Information, copyrightable works, works of authorship, and all patents, registrations or applications related thereto, all other intellectual property or proprietary information and all similar or related information (whether or not patentable and copyrightable and whether or not reduced to tangible form or practice) which relate to the business, research and development, or existing or future products or services of the Company and/or its subsidiaries and which are conceived, developed or made by Executive during Executive’s employment with the Company (“Work Product”) shall be deemed to be “work made for hire” (as defined in the Copyright Act, 17 U.S.C. §101 et seq., as amended) and owned exclusively by the Company. To the extent that any Work Product is not deemed to be a “work made for hire” under applicable law, and all right, title and interest in and to such Work Product have not automatically vested in the Company, Executive hereby (a) irrevocably assigns, transfers and conveys, and shall assign transfer and convey, to the fullest extent permitted by applicable law, all right, title and interest in and to the Work Product on a worldwide basis to the Company (or such other person or entity as the Company shall designate), without further consideration, and (b) waives all moral rights in or to all Work Product, and to the extent such rights may not be waived, agrees not to assert such rights against the Company or its respective licensees, successors, or assigns. In order to permit the Company to claim rights to which it may be entitled, Executive agrees to promptly

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disclose to the Company in confidence all Work Product which the Executive makes arising out of the Executive’s employment with the Company. Executive shall assist the Company in obtaining patents on all Work Product patentable by the Company in the United States and in all foreign countries, and shall execute all documents and do all things necessary to obtain letters patent, to vest the Company with full and extensive title thereto, and to protect the same against infringement by others.

5.TERMINATION OF EMPLOYMENT.

5.1Termination by Reason of Death or Disability. Executive’s employment hereunder shall terminate immediately upon the death of Executive. The Company may terminate this Agreement upon written notice to Executive if Executive suffers any physical or mental impairment or incapacity that results in Executive being unable to perform Executive’s essential duties, responsibilities and the functions of Executive’s position with the Company for periods aggregating one-hundred twenty (120) days in any three hundred sixty (360) day period (“Disability”).

5.2Termination by Company for Cause. The employment of Executive hereunder shall terminate immediately upon written notice delivered by the Company to the Executive of termination for “Cause”. “Cause” shall mean (i) Executive’s conviction (including any plea of guilty or no contest) of (x) any felony involving the embezzlement, theft or misappropriation of monies or other property, of the Company or otherwise; or (y) any crime of moral turpitude; (ii) gross misconduct in the performance of Executive’s duties; or (iii) the repeated failure by Executive (except by reason of Disability) to render full and proper services as required by the terms of Executive’s employment after failure to cure such failure within 30 days after receiving written notice from the Company or the Board of Directors detailing the alleged failure.

5.3Termination by the Company without Cause. The employment of Executive hereunder shall terminate immediately upon written notice delivered by the Company to the Executive of termination by the Company upon delivery to Executive of written notice of termination by the Company, which shall be deemed to be “without cause” unless termination is expressly stated to be pursuant to Section 5.1 or Section 5.2.

5.4Termination by the Executive for Good Reason. The employment of Executive hereunder shall terminate 30 days following the date on which Executive shall give the Company notice of termination for Good Reason (as hereinafter defined), or such earlier date as may be determined by the Company, the Compensation Committee or the Board of Directors. For purposes of this Agreement, “Good Reason” shall mean without Executive’s consent (i) a material diminution in the duties, authority or responsibilities of Executive or a material breach of this Agreement by the Company, or (ii) requiring Executive to relocate his principal place of employment to a location that is more than thirty-five (35) miles from the location of the Company’s principal office in the Oklahoma City area as of the Effective Date, provided that the Company fails to cure such material diminution, breach or relocation within 30 days of receipt of a written notice from Executive of such Good Reason event (which notice shall be provided by Executive to the Company within 90 days following the initial occurrence of such event). Executive’s Termination Date as a result of any of the foregoing events must occur within two (2) years of the initial occurrence of any such event.

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6.PAYMENTS UPON TERMINATION.

6.1Termination Other Than For Cause. If Executive’s employment with the Company is terminated (i) by the Company other than for “Cause” (as defined herein), including if the Company provides notice of nonrenewal within 90 days of the end of the Initial Period or any Extension, (ii) by the Executive for Good Reason, or (iii) as a result of Executive’s Death or Disability (as provided in Section 5.1 herein), then:

6.1.1the Company shall provide Executive (or Executive’s estate, if applicable) (i) on the Termination Date (as such term is defined in Section 6.3), a lump sum payment equal to all accrued and unpaid salary and other compensation payable to Executive by the Company and all accrued and unpaid vacation and sick pay payable to Executive by the Company with respect to services rendered by Executive to the Company through the Termination Date; and (ii) subject to Section 6.1.4 and Section 10.10.5, a lump sum payment on the sixtieth (60^th) day following the Termination Date equal to the amount Executive would have earned as Base Salary and Minimum Annual Bonus during the two-year period following such date had Executive’s employment not been terminated, reduced by the fixed and determinable amount of any payments to be made to Executive during the two-year period following Executive’s termination under any long-term disability insurance policy maintained by the Company for Executive’s benefit; and

6.1.2subject to Section 6.1.4, (i) all restricted stock and restricted stock units that have been granted to Executive by the Company and that would have vested during the three-year period following the Termination Date solely as a result of Executive’s continued service to the Company will immediately vest on the Termination Date, and (ii) all stock options and stock appreciation rights that have been granted to Executive by the Company and that would have vested during the three-year period following the Termination Date solely as a result of Executive’s continued service to the Company will immediately vest and become exercisable on the Termination Date and will remain exercisable in accordance with the terms and conditions applicable to such equity award; and

6.1.3subject to Section 6.1.4, the Company will pay the cost for continuation coverage under the Company Group Health Plans (as defined herein, and to the extent permitted by applicable law and the terms of each Company Group Health Plan) under the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”) for Executive and his eligible family members covered under the Company Group Health Plan immediately prior to Termination Date. Such premiums will be paid by the Company during the 18 month period immediately following Executive’s Termination Date or until Executive becomes eligible for group health plan benefits from another employer, whichever occurs first, provided that Executive timely elects COBRA coverage (“COBRA Benefits”) and provided that Executive’s continued participation is possible under the general terms and provisions of such Company Group Health Plans. Executive agrees to promptly inform the Company in writing if Executive becomes eligible to receive group health coverage from another employer. The period of such COBRA Benefits will be considered part of Executive’s COBRA coverage entitlement period. At the conclusion of the maximum 18 month period for which the Company will pay the cost of COBRA Benefits, as provided above, Executive may, at Executive’s sole expense, continue to receive COBRA Benefits for the remainder of the

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COBRA coverage entitlement period, if any, provided under the terms of the Company Group Health Plans; and

6.1.4notwithstanding anything herein to the contrary, it shall be a condition to Executive’s right to receive the amounts provided for in Section 3.2.1.2, Section 6.1.1, Section 6.1.2 and Section 6.1.3, that Executive timely execute and deliver to the Company, a general release substantially in the form attached hereto as “Exhibit A” (the “General Release”) within twenty-one (21) days of its delivery to Executive (or such longer period as may be required under the Age Discrimination in Employment Act of 1967, as amended), without subsequent revocation of the General Release. Upon satisfaction of the General Release condition, the payment of the severance benefits will commence as provided in Section 6.1.1.

6.2Termination by the Company For Cause or by the Executive because of a Voluntary Termination. If Executive’s employment with the Company is terminated (i) by the Company for “Cause” (as defined herein), or (ii) by the Executive voluntarily other than for Good Reason, Executive will be entitled to receive on the Termination Date (as such term is defined in Section 6.3), a lump sum payment equal to all accrued and unpaid salary and other compensation payable to Executive by the Company and all accrued and unpaid vacation and sick pay payable to Executive by the Company with respect to services rendered by Executive to the Company through the Termination Date and, subject to the general release requirement in Section 3.2.1.2 and Section 6.1.4, the payment of a pro-rated Minimum Annual Bonus amount.

6.3Termination Date. For purposes of this Section 6, the term, “Termination Date” shall mean that date of Executive’s “separation from service” as that term is defined in Section 1.409A-1(h) of the Treasury Regulations.

6.4Timing of Payment. Notwithstanding anything to the contrary in this Agreement, to the extent required to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), if Executive is deemed by the Board of Directors (or its delegate), in its sole discretion, to be a “specified employee” for purposes of Section 409A(a)(2)(B) of the Code, Executive agrees that any non-qualified deferred compensation payments due to Executive under this Agreement in connection with a termination of Executive’s employment that would otherwise have been payable at any time during the six-month period immediately following such termination of employment shall not be paid prior to, and shall instead be payable in a lump sum on the first business day of the seventh month following Executive’s Termination Date.

7.CHANGE IN CONTROL.

7.1Notwithstanding the provisions of any other agreement to the contrary, if Executive’s employment with the Company or its successor is terminated on or before the second anniversary of the date of occurrence of a Change in Control (a) by the Company or its successor other than for Cause, (b) by the Executive for Good Reason, or (c) as a result of Executive’s death or disability, then, in addition to the benefits provided in Section 6.1 hereof, (i) all restricted stock and restricted stock units that have been granted to Executive by the Company and that would have vested at any time after the date of Executive’s termination solely as a result of Executive’s continued service to the Company will immediately vest on the date of termination; and (ii) all stock options and stock

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appreciation rights that have been granted to Executive by the Company and that would have vested at any time after the date of Executive’s termination solely as a result of Executive’s continued service to the Company will immediately vest and become exercisable on the date of termination.

7.2For purposes of this Section 7, a “Change in Control” of the Company will be deemed to have occurred if: (a) there shall be consummated (i) any consolidation or merger of the Company into or with another person (as such term is used in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) pursuant to which shares of the Company’s common stock would be converted into cash, securities or other property, other than any consolidation or merger of the Company in which the persons who were stockholders of the Company immediately prior to the consummation of such consolidation or merger are the beneficial owners (within the meaning of Rule 13d-3 under the Exchange Act), immediately following the consummation of such consolidation or merger, of more than 50% of the combined voting power of the then outstanding voting securities of the person surviving or resulting from such consolidation or merger, (ii) any sale, lease or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; (iii) any sale, lease or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company (i.e., more than 50% of the gross fair market value of the assets of the Company, determined without regard to any liabilities associated with such assets); or (iv) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the company.

8.INJUNCTIVE RELIEF.

Executive hereby recognizes, acknowledges and agrees that in the event of any breach by Executive of any of his covenants, agreements, duties or obligations hereunder, the Company would suffer great and irreparable harm, injury and damage, the Company would encounter extreme difficulty in attempting to prove the actual amount of damages suffered by the Company as a result of such breach, and the Company would not be reasonably or adequately compensated in damages in any action at law. Executive therefore agrees that, in addition to any other remedy the Company may have at law, in equity, by statute or otherwise, in the event of any breach by Executive of any of the covenants, agreements, duties or obligations hereunder, the Company or its subsidiaries shall be entitled to seek and receive temporary, preliminary and permanent injunctive and other equitable relief from any court of competent jurisdiction to enforce any of the rights of the Company or its subsidiaries or any of the covenants, agreements, duties or obligations of Executive hereunder, or otherwise to prevent the violation of any of the terms or provisions hereof, all without the necessity of proving the amount of any actual damage to the Company or its subsidiaries thereof resulting therefrom; provided, however, that nothing contained in this Section 8 shall be deemed or construed in any manner whatsoever as a waiver by the Company or its subsidiaries of any of the rights which any of them may have against Executive at law, in equity, by statute or otherwise arising out of, in connection with or resulting from the breach by Executive of any of his covenants, agreements, duties or obligations hereunder.

9.NON-SOLICITATION.

For so long as Executive is employed by the Company and continuing for twelve (12) months thereafter, Executive shall not, without the prior written consent of the Company, directly or

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indirectly, as a sole proprietor, member of a partnership, stockholder, or investor, officer or director of a corporation, or as an employee, associate, consultant or agent of any person, partnership, corporation or other business organization or entity other than the Company: (i) (x) solicit or endeavor to entice away from the Company, or any of its subsidiaries or affiliates, any person or entity who is employed by, or serves as an agent or key consultant of, the Company, or any of its subsidiaries or affiliates, or (y) solicit any person or entity who during the then most recent twelve (12) month period, was employed by or served as an agent or key consultant of the Company or any of its subsidiaries or affiliates, or (ii) endeavor to entice away from the Company or any of its subsidiaries or affiliates or solicit with respect to services then being rendered or planned, proposed or contemplated to be rendered by the Company or any such subsidiary or affiliate, any persons or entity who is, or was within the then most recent twelve (12) month period, a customer or client (or reasonably anticipated, to the general knowledge of Executive or the public, to become a customer or client) of the Company or any of its subsidiaries or affiliates.

10.MISCELLANEOUS.

10.1Entire Agreement. This Agreement contains the entire agreement of the parties regarding the employment of Executive by the Company and supersedes any prior agreement, arrangement or understanding, whether oral or written, between the Company and Executive concerning Executive’s employment hereunder.

10.2Notices. All notices, requests and other communications (collectively, “Notices”) given pursuant to this Agreement shall be in writing, and shall be delivered by facsimile transmission with a copy delivered by personal service or by United States first class, registered or certified mail (return receipt requested), postage prepaid, addressed to the party at the address set forth below:

If to the Company:	Gulfport Energy Corporation 14313 North May Avenue, Suite 100 Oklahoma City, Oklahoma 73134 Attention: Board of Directors
If to Executive:	Mike Liddell 14313 North May Avenue, Suite 100 Oklahoma City, Oklahoma 73134 or the Executive’s address in the Company’s personnel records

Any Notice shall be deemed duly given when received by the addressee thereof, provided that any Notice sent by registered or certified mail shall be deemed to have been duly given three days from date of deposit in the United States mails, unless sooner received. Either party may from time to time change its address for further Notices hereunder by giving notice to the other party in the manner prescribed in this Section 10.2.

10.3Governing Law. This Agreement has been made and entered into in the state of Oklahoma and shall be construed in accordance with the laws of the state of Oklahoma without regard to the conflict of laws principles thereof.

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10.4Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

10.5Interpretation. The Compensation Committee or Board of Directors of the Company shall make all determinations under this Agreement and shall have the exclusive authority to interpret its terms and conditions. All determinations and interpretations made by the Compensation Committee or Board of Directors shall be final for all purposes and binding on the parties.

10.6Severable Provisions. The provisions of this Agreement are severable, and if any one or more provisions are determined to be judicially unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

10.7Successors and Assigns. This Agreement and all obligations and benefits of Executive and the Company hereunder shall bind and inure to the benefit of Executive and the Company, their respective affiliates, and their respective successors and assigns.

10.8Amendments and Waivers. No amendment or waiver of any term or provision of this Agreement shall be effective unless made in writing. Any written amendment or waiver shall be effective only in the instance given and then only with respect to the specific term or provision (or portion thereof) of this Agreement to which it expressly relates, and shall not be deemed or construed to constitute a waiver of any other term or provision (or portion thereof) waived in any other instance.

10.9Title and Headings. The titles and headings contained in this Agreement are included for convenience only and form no part of the agreement between the parties.

10.10Compliance with Tax Rules for Nonqualified Deferred Compensation Plans. This Agreement is intended to comply with, or otherwise be exempt from, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and shall be administered, interpreted, and construed in a manner that does not result in the imposition on Executive of any additional tax, penalty, or interest under Section 409A of the Code.

10.10.1For purposes of Section 409A of the Code, the right to a series of installment payments under this Agreement will be treated as a right to a series of separate payments.

10.10.2Payment dates provided for in this Agreement will be deemed to incorporate grace periods that are treated as made upon a designated payment date as provided by Treasury Regulation §1.409A-3(d).

10.10.3If the Company determines in good faith that any provision of this Agreement would cause Executive to incur an additional tax, penalty, or interest under Section 409A of the Code, the Company and Executive shall use reasonable efforts to reform such provision, if possible, in a mutually agreeable fashion to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code. The preceding provisions, however, shall not be construed as a guarantee or warranty by the Company of any particular tax effect to Executive under this Agreement. The Company will not

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be liable to Executive for any payment made under this Agreement, at the direction or with the consent of Executive, that is determined to result in an additional tax, penalty, or interest under Section 409A of the Code, nor for reporting in good faith any payment made under this Agreement as an amount includible in gross income under Section 409A of the Code.

10.10.4“Termination of employment,” “Termination Date,” “date of termination” or words of similar import, as used in this Agreement mean, for purposes of any payments under this Agreement that are payments of deferred compensation subject to Section 409A of the Code, Executive’s “separation from service” as defined in Treasury Regulation § 1.409A-1(h).

10.10.5Payments under Section 6 and elsewhere in this Agreement will be administered and interpreted to maximize the exceptions to Code Section 409A for short-term deferrals and for separation pay due to involuntary separation from service. Any payment under this Agreement that is payable during the short-term deferral period (as described in Treasury Regulations §1.409A-1(b)(4)) or that is paid within the involuntary separation pay safe harbor (as described in Treasury Regulations §1.409A-1(b)(9)(iii)) will be treated as not providing for a deferral of compensation and will not be aggregated with any nonqualified deferred compensation plans or payments. The Severance Payments under Section 6 will commence on the date provided in Section 6.1.1, subject to the General Release requirement. It is intended that the Severance Payments will in all events commence 60 days following Executive’s Separation from Service, regardless of which taxable year Executive actually delivers the executed General Release to the Company. However, if the Severance Payments are deferred compensation subject to Code Section 409A and if the period during which Executive has discretion to execute or revoke the General Release required in Section 6.1.4 exceeds 60 days from the date of termination, the payments will commence on the eighth day following receipt by the Company of Executive’s executed General Release. If the period during which Executive has discretion to execute or revoke the General Release required in Section 6.1.4 straddles two taxable years of Executive, then the Company will commence the Severance Payments in the second of such taxable years. Executive may not, directly or indirectly, designate the calendar year of the commencement of any payment hereunder. Notwithstanding the foregoing, amounts payable hereunder which are not nonqualified deferred compensation, or which may be accelerated pursuant to Section 409A, such as distributions for applicable tax payments, may be accelerated, but not deferred, at the sole discretion of the Company.

10.10.6Notwithstanding anything to the contrary in this Agreement, to the extent required to comply with Section 409A of the Code, if Executive is deemed by the Board (or its delegate), in its sole discretion, to be a “specified employee” for purposes of Section 409A(a)(2)(B) of the Code, Executive agrees that any non-qualified deferred compensation payments due to Executive under this Agreement in connection with a termination of Executive’s employment that would otherwise have been payable at any time during the period immediately following such termination of employment and ending on the date that is six months after the Termination Date (or if earlier, Executive’s date of death) shall not be paid prior to, and shall instead be payable in a lump sum on the first business day following the end of such non-payment period.

10.11Survival. Notwithstanding anything to the contrary contained herein, the provisions of Section 4, Section 8, Section 9, and Section 10 shall survive the termination of this Agreement.

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[Signatures on following page]

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IN WITNESS WHEREOF, each of the parties has signed this Agreement on the date opposite his signature below.

Date: November 7, 2012	THE “COMPANY” GULFPORT ENERGY CORPORATION By: /s/ James D. Palm Name:   James D. Palm Its: Chief Executive Officer
Date: November 7, 2012	THE “EXECUTIVE” /s/ Mike Liddell Mike Liddell, in his individual capacity

Signature page to Employment Agreement

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EXHIBIT A

GENERAL RELEASE OF ALL CLAIMS

This general release (this “Agreement”) is entered into pursuant to the terms and conditions of the Employment Agreement, originally dated November 7, 2012 (“Employment Agreement”), between Mike Liddell (“Executive”) and Gulfport Energy Corporation (the “Company”). In exchange for and in consideration of the benefits described in the Employment Agreement (the “Severance Benefits”), Executive, on behalf of Executive and his agents, representatives, administrators, receivers, trustees, estates, heirs, devisees, assignees, legal representatives, and attorneys, past or present (as the case may be), hereby irrevocably and unconditionally releases, discharges, and acquits all the Released Parties (as defined below) from any and all claims, promises, demands, liabilities, contracts, debts, losses, damages, attorneys’ fees and causes of action of every kind and nature, known and unknown, asserted and unasserted, accrued or unaccrued, liquidated or contingent, direct or indirect up to the effective date of this Agreement, including but not limited to causes of action, claims or rights arising out of, or which might be considered to arise out of or to be connected in any way with (i) Executive’s employment with the Company or the termination thereof; (ii) Executive’s employment agreement, or offer letter or any other agreements between Executive and the Company or the termination thereof; (iii) any treatment of Executive by any of the Released Parties, which shall include, without limitation, any treatment or decisions with respect to hiring, placement, promotion, discipline, work hours, demotion, transfer, termination, compensation, performance review, or training; (iv) any statements or alleged statements by the Company or any of the Released Parties regarding Executive, whether oral or in writing; (v) any damages or injury that Executive may have suffered, including without limitation, emotional or physical injury, compensatory damages, or lost wages; or (vi) employment discrimination, which shall include, without limitation, any individual or class claims of discrimination on the basis of age, disability, sex, race, religion, national origin, citizenship status, marital status, sexual preference, or any other basis whatsoever.

Said release shall be construed as broadly as possible and shall also extend to release the Released Parties, without limitation, from any and all claims that Executive has alleged or could have alleged, whether known or unknown, accrued or unaccrued, against any Released Party for violation(s) of any of the following: the National Labor Relations Act, as amended; Title VII of the Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act; the Civil Rights Act of 1991; Sections 1981-1988 of Title 42 of the United States Code; the Equal Pay Act; the Employee Retirement Income Security Act of 1974, as amended; the Immigration Reform Control Act, as amended; the Americans with Disabilities Act of 1990, as amended; the Fair Labor Standards Act, as amended; the Occupational Safety and Health Act, as amended; any other federal, state, or local law or ordinance; any public policy, whistleblower, contract, tort, or common law; and any demand for costs or litigation expenses, except as otherwise provided in the Employment Agreement, including but not limited to attorneys’ fees.

The term “Released Parties” or “Released Party” as used herein shall mean and include: the Company and its parents, subsidiaries, affiliates, investors and all of their predecessors and successors (collectively, the “Released Entities”), and with respect to each such Released Entity, all of its former, current, and future officers, directors, agents, representatives, employees, servants, owners, shareholders, partners, joint venturers, investors, attorneys, insurers, administrators, and

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fiduciaries, and any other persons acting by, through, under, or in concert with any of the persons or entities listed herein.

Pursuant to the Older Workers Benefit Protection Act of 1990, Executive understands and acknowledges that by executing this Agreement and releasing all claims against any of the Released Parties, he has waived any and all rights or claims that he has or could have against any Released Party under the Age Discrimination in Employment Act, which includes any claim that any Released Party discriminated against Executive on account of his age. Executive also acknowledges the following:

(a)    The Company, by this written Agreement, has advised Executive to consult with an attorney prior to executing this Agreement;

(b)    Executive has had the opportunity to consult with his own attorney concerning this Agreement and Executive acknowledges that this Agreement is worded in an understandable way;

(c)    The rights and claims waived in this Agreement are in exchange for additional consideration over and above anything to which Executive was already undisputedly entitled;

(d)    This Agreement does not include claims arising after the Effective Date of this Agreement (as defined below), provided, however, that any claims arising after the Effective Date of this Agreement from the then-present effect of acts or conduct occurring before the Effective Date of this Agreement shall be deemed released under this Agreement; and

(e)    The Company has provided Executive the opportunity to review and consider this Agreement for twenty-one (21) days from the date Executive receives this Agreement. At Executive’s option and sole discretion, Executive may waive the twenty-one (21) day review period and execute this Agreement before the expiration of twenty-one (21) days. In electing to waive the twenty-one (21) day review period, Executive acknowledges and admits that he was given a reasonable period of time within which to consider this Agreement and his waiver is made freely and voluntarily, without duress or any coercion by any other person.

Executive may revoke this Agreement within a period of seven (7) days after execution of this Agreement. Executive agrees that any such revocation is not effective unless it is made in writing and delivered to the Company by the end of the seventh (7th) calendar day. Under any such valid revocation, Executive shall not be entitled to any severance pay or any other benefits under this Agreement. This Agreement becomes effective on the eighth (8th) calendar day after it is executed by both parties.

Executive confirms that no claim, charge, or complaint against any of the Released Parties, brought by him, exists before any federal, state, or local court or administrative agency. Executive hereby waives his right to accept any relief or recovery, including costs and attorney’s fees, from any charge or complaint before any federal, state, or local court or administrative agency against any of the Released Parties, except as such waiver is prohibited by law.

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The existence, terms, and conditions of this Agreement are and shall be deemed to be confidential and shall not hereafter be disclosed by Executive to any other person or entity, except (i) as may be required by law, regulation or applicable securities exchange requirements; and (ii) to Executive’s attorneys, spouse, accountants and/or financial advisors, provided that the person to whom disclosure is made is made aware of the confidentiality provisions of this Agreement and such person/s agrees to keep the terms of this Agreement confidential. Executive further agrees not to solicit or initiate any demand by others not party to this Agreement for any disclosure of the existence, terms, and conditions of this Agreement.

Executive agrees that he will not, unless otherwise prohibited by law, at any time hereafter, participate in as a party, or permit to be filed by any other person on his behalf or as a member of any alleged class of person, any action or proceeding of any kind, against the Company, or its past, present, or future parents, subsidiaries, divisions, affiliates, employee benefit and/or pension plans or funds, successors and assigns and any of their past, present or future directors, officers, agents, trustees, administrators, attorneys, employees or assigns (whether acting as agents for the Company or in their individual capacities), with respect to any act, omission, transaction or occurrence up to and including the date of the execution of this Agreement. Executive further agrees that he will not seek or accept any award or settlement from any source or proceeding with respect to any claim or right covered by this paragraph and that this Agreement shall act as a bar to recovery in any such proceedings.

Executive agrees that neither this Agreement nor the furnishing of the consideration set forth in this Agreement shall be deemed or construed at any time for any purpose as an admission by the Released Parties of any liability or unlawful conduct of any kind. Executive further acknowledges and agrees that the consideration provided for herein is adequate consideration for Executive’s obligations under this Agreement.

This Agreement shall be governed by and construed in accordance with the laws of the State of Oklahoma without regard to its conflicts of law provisions. If any provision of this Agreement other than the general release set forth above is declared legally or factually invalid or unenforceable by any court of competent jurisdiction and if such provision cannot be modified to be enforceable to any extent or in any application, then such provision immediately shall become null and void, leaving the remainder of this Agreement in full force and affect. If any portion of the general release set forth in this Agreement is declared to be unenforceable by a court of competent jurisdiction in any action in which Executive participates or joins, Executive agrees that all consideration paid to him under the Employment Agreement shall be offset against any monies that he may receive in connection with any such action.

This Agreement, together with the Employment Agreement, sets forth the entire agreement between Executive and the Released Parties and it supersedes any and all prior agreements or understandings, whether written or oral, between the parties, except as otherwise specified in this Agreement or the Employment Agreement. Executive acknowledges that he has not relied on any representations, promises, or agreements of any kind made to him in connection with his decision to sign this Agreement, except for those set forth in this Agreement.

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This Agreement may not be amended except by a written agreement signed by both parties, which specifically refers to this Agreement.

EXECUTIVE ACKNOWLEDGES THAT HE CAREFULLY HAS READ THIS AGREEMENT; THAT HE HAS HAD THE OPPORTUNITY TO THOROUGHLY DISCUSS ITS TERMS WITH COUNSEL OF HIS CHOOSING; THAT HE FULLY UNDERSTANDS ITS TERMS AND ITS FINAL AND BINDING EFFECT; THAT THE ONLY PROMISES MADE TO SIGN THIS AGREEMENT ARE THOSE STATED AND CONTAINED IN THIS AGREEMENT; AND THAT HE IS SIGNING THIS AGREEMENT KNOWINGLY AND VOLUNTARILY. EXECUTIVE STATES THAT HE IS IN GOOD HEALTH AND IS FULLY COMPETENT TO MANAGE HIS BUSINESS AFFAIRS AND UNDERSTANDS THAT HE MAY BE WAIVING SIGNIFICANT LEGAL RIGHTS BY SIGNING THIS AGREEMENT.

IN WITNESS WHEREOF, Executive has executed this Agreement as of the date set forth below.

AGREED AND ACCEPTED

__________________________

__________________

Date: _____________________

Sworn to and subscribed before me

this ____ day of _________, 20__

________________________________________Notary Public

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RECEIPT OF AGREEMENT

I acknowledge that I received today a copy of Gulfport Energy Corporation’s General Release of all Claims (the “Agreement”). I have been advised of the following:

1)    That I have twenty-one (21) days to consider the Agreement.

2)    I have the opportunity to discuss with Gulfport Energy Corporation any questions or concerns I may have regarding the terms or language of the Agreement.

3)    I have been advised to see an attorney of my choosing to review the Agreement.

4)    I should not sign the Agreement unless I fully understand its terms and, if I sign the Agreement, I do so of my own free will.

5)    I have seven (7) days after signing the Agreement to revoke the Agreement, and the Agreement shall not become effective, enforceable or binding until this revocation period has expired. Any revocation must be in writing and either postmarked and mailed to or hand-delivered to the Company within seven (7) days after I sign the Agreement.

6)    The Agreement does not waive any rights or claims that may arise after its execution.

7)    In consideration for signing the Agreement, I will be receiving Severance Benefits or benefits in addition to any monies I am already entitled to.

8)    No other promises have been made to me beyond the terms of the Employment Agreement and the Agreement.

Dated:    _____________            ________________________________

_____________

WITNESS:

Dated:_____________    ________________________________        Signature

________________________________    

Witness’ printed name and title

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WAIVER OF 21-DAY REVIEW PERIOD – OPTIONAL

I acknowledge that I was provided with a copy of Gulfport Energy Corporation’s General Release of all Claims (the “Agreement”) on ___________, I have had an opportunity to review the Agreement, have been afforded the opportunity to have it reviewed by an attorney of my choosing, and have made the voluntary decision to execute the Agreement prior to the expiration of the twenty-one (21) day review period. Therefore, I have executed the Agreement today, and I understand that I have seven (7) days from today to revoke the Agreement in writing. I further understand that the Agreement shall not become effective, enforceable, or binding until this revocation period has expired.

Dated:    _____________            ________________________________

_____________

WITNESS:

Dated:_____________    ________________________________        Signature

________________________________    

Witness’ printed name and title

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EX-10.5

Exhibit 10.5

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is made and entered into November 7, 2012, by and between Gulfport Energy Corporation, a Delaware corporation (the “Company”), and James D. Palm, an individual (“Executive”).

RECITALS

WHEREAS, the Company is engaged in the exploration and development of crude oil and natural gas fields and related activities.

WHEREAS, Executive is and has been for some time a principal officer of Company, and is experienced in the management and conduct of the Company’s business.

WHEREAS, the Company desires to continue to employ Executive, and Executive desires to continue be employed by the Company, upon the terms and subject to the conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and the terms, covenants and conditions contained herein, the Company and Executive agree as follows:

1.EMPLOYMENT AND DUTIES.

1.1General. The Company hereby employs Executive, and Executive agrees to serve, as Chief Executive Officer of the Company, upon the terms and subject to the conditions set forth herein. Executive shall report directly to the Chairman of the Board of the Company. Subject to the direction and control of the Board of Directors, Executive shall have all the responsibilities and powers normally associated with such position and Executive shall perform such other duties and responsibilities as may be designated from time to time by the Chairman of the Board.

1.2Exclusive Services. Executive shall devote his full business time, energy and efforts faithfully and diligently to promote the Company’s interests. Executive shall render his services exclusively to the Company during the Employment Term. The terms of this Section 1 shall not prevent Executive from investing or otherwise managing his assets in such form or manner as he chooses and spending such time, whether or not during business hours, as he deems necessary to manage his investments, so long as he is able to fulfill his duties pursuant to Section 1.1 above.

2.TERM.

Subject to the provisions for termination provided in Section 5, the term of Executive’s employment under this Agreement shall commence as of November 1, 2012 (the “Effective Date”) and shall terminate on the third anniversary of the Effective Date (the “Initial Period”); provided,

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however, that unless either party shall give written notice to the other party of an election not to extend or renew Executive’s employment hereunder at least ninety (90) days prior to the end of the Initial Period, or any anniversary thereof, the term of this Agreement shall automatically be extended by successive one-year periods (each an “Extension”). The term of this Agreement, including the Initial Period and any Extension, is hereinafter referred to as the “Employment Term.” Each 12 months period beginning on the Effective Date or any anniversary thereof and ending on the day prior to the anniversary thereof is hereinafter referred to as a “Contract Year.”

3.COMPENSATION.

3.1Base Salary. As compensation for services rendered under this Agreement, the Company shall pay to Executive a base salary (the “Base Salary”) at an annualized rate of $300,000 payable in accordance with the normal payroll procedures of the Company. From time to time at the sole discretion of the Compensation Committee (the “Compensation Committee”) of the Board of Directors of the Company (the “Board of Directors”), Executive’s Base Salary shall be reviewed by the Compensation Committee and/or the Board of Directors and may be increased, but not decreased, by the Compensation Committee or the Board of Directors in their sole discretion. The term “Base Salary” as used herein shall mean and refer to the then current base salary, as adjusted from time to time in accordance with this Section 3.1. The Company shall deduct from the Base Salary amounts sufficient to cover applicable federal, state and/or local income tax withholdings and any other amounts which the Company is required to withhold by applicable law.

3.2Bonuses.

3.2.1Annual Cash Bonus.

3.2.1.1In addition to Base Salary, Executive will be eligible, for each Contract Year during the Employment Term, to receive a discretionary cash bonus as determined by the Compensation Committee, if any, or to participate in any cash incentive plan then in existence and to receive an annual cash performance bonus (an “Annual Cash Bonus”) in accordance with the terms of such plan or plans; provided that the minimum annual bonus for each Contract Year during the Employment Term will not be less than $500,000 (the “Minimum Annual Bonus”). The amount of any such Annual Cash Bonuses (subject to the requirement to pay the Minimum Annual Bonus) and the annual target performance goals under any cash incentive plan that may be adopted during the Employment Term shall be determined by the Compensation Committee, in its sole discretion, and, subject to the Minimum Annual Bonus requirement, may be based on the Company’s fiscal year.

3.2.1.2If Executive’s employment with the Company is terminated (i) by the Company other than for “Cause” (as defined herein), including if the Company provides notice of nonrenewal within 90 days of the end of the Initial Period or any Extension, (ii) by the Executive for Good Reason, or (iii) as a result of Executive’s Death or Disability (as provided in Section 5.1 herein), then Executive (or Executive’s estate, if applicable) will be entitled to a pro-rated portion of the Minimum Annual Bonus based on the Minimum Annual Bonus multiplied by a fraction, the numerator of which will be the number of days in the Contract Year that have elapsed between the beginning of the Contract Year and the date of employment termination and the denominator of

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which will be the total number of days (365/366) in the Contract Year. The Executive’s right to receive payment of any pro-rated Minimum Annual Bonus for the year of termination will be contingent on Executive’s timely execution and delivery to the Company of a general release substantially in the form attached hereto as “Exhibit A” as described in Section 6.1.5 herein and will be subject to payment at the same time as the payments described in Section 6.1.1 that are conditioned upon execution and delivery of a general release.

3.2.2Equity Awards. In addition to the Base Salary, Executive will be eligible, for each fiscal year of the Company ending during the Employment Term, to participate in the Company’s Amended and Restated 2005 Stock Incentive Plan or such other equity incentive plan or plans then in existence for the benefit of employees, and may in the discretion of the Compensation Committee receive an equity award (an “Equity Award”), in accordance with the terms of such plan or plans. The timing and amount of such Equity Awards, any target performance goals and the vesting terms of such awards will be determined by the Compensation Committee in its sole discretion. Except as expressly set forth herein, any Equity Awards are pursuant to and will incorporate all terms and conditions of the Company’s Amended and Restated 2005 Stock Incentive Plan or such other equity incentive plan or plans then in existence for the benefit of employees, as applicable, and the Company’s standard form of award agreement. If Executive’s employment with the Company terminates prior to any scheduled vesting date then, except as expressly provided herein, Executive shall forfeit all rights and interests in and to such unvested Equity Awards.

3.3Benefits.

3.3.1Vacation. Executive shall be entitled to take up to four weeks paid vacation for each calendar year during Executive’s employment; provided, however, that vacation shall only be taken at such times as not to interfere with the necessary performance of Executive’s duties and obligations under this Agreement.

3.3.2Automobile. During the Employment Term, Executive shall be entitled to use of a Company provided automobile, including Company payment of all insurance and maintenance costs. Such automobile will be of a type consistent with the class of vehicle previously provided to Executive by the Company and will be replaced on a basis consistent with the Company’s previous replacement schedule.

3.3.3Other Benefits; Insurance. During the term of Executive’s employment under this Agreement, if and to the extent eligible, Executive shall be entitled to participate in all Company Group Health Plans then in effect, including, without limitation, any supplemental disability coverage available to similarly situated executive employees. For purposes of this Agreement, “Company Group Health Plans” means all operative medical, dental, group life, disability and accidental death and dismemberment insurance, all on the same basis generally applicable to similarly situated employees of the Company; provided, however, that nothing contained in this Agreement will, in any manner whatsoever, directly or indirectly, require or otherwise prohibit the Company from amending, modifying, curtailing, discontinuing, or otherwise terminating any Company Group Health Plan at any time (whether before or after the date of Executive’s termination). Executive will be eligible to receive life insurance coverage providing a death benefit of not less than $500,000.

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3.3.4Retirement Plans. During the term of Executive’s employment under this Agreement, if and to the extent eligible, Executive shall be entitled to participate in all Company Retirement Plans then in effect. For purposes of this Agreement, “Company Retirement Plans” means the Company’s 401(k) Profit Sharing Plan and all operative employee pension benefit plans (tax-qualified and nonqualified plans) that may in the future be sponsored or maintained by the Company, all on the same basis generally applicable to similarly situated employees of the Company; provided, however, that nothing contained in this Agreement will, in any manner whatsoever, directly or indirectly, require or otherwise prohibit the Company from amending, modifying, curtailing, discontinuing, or otherwise terminating any Company Retirement Plan at any time (whether before or after the date of Executive’s termination).

3.3.5Reimbursement. Executive shall be entitled to reimbursement from the Company for the reasonable costs and expenses incurred in connection with the performance of the duties and obligations provided for in this Agreement. Reimbursement shall be paid upon prompt presentation of expense statements or vouchers and such other supporting information as the Company may from time to time require.

4.TRADE SECRETS, CONFIDENTIAL INFORMATION AND INVENTIONS.

4.1Trade Secrets. During the course of Executive’s employment, Executive will have access to various trade secrets, confidential information and inventions of Company as defined below.

4.1.3“Confidential Information” means all information and material which is proprietary to the Company, whether or not marked as “confidential” or “proprietary” and which is disclosed to or obtained from the Company by the Executive, which relates to the Company’s past, present or future research, development or business activities. Confidential Information is all information or materials prepared by or for the Company and includes, without limitation, all of the following: designs, drawings, specifications, techniques, models, data, source code, object code, documentation, diagrams, flow charts, research, development, processes, systems, methods, machinery, procedures, “know-how”, new product or new technology information, formulas, patents, patent applications, product prototypes, product copies, cost of production, manufacturing, developing or marketing techniques and materials, cost of production, development or marketing time tables, customer lists, strategies related to customers, suppliers or personnel, contract forms, pricing policies and financial information, volumes of sales, and other information of similar nature, whether or not reduced to writing or other tangible form, and any other Trade Secrets, as defined by Section 4.1.3, or non-public business information.

4.1.4“Inventions” means all discoveries, concepts and ideas, whether patentable or not, including but not limited to, processes, methods, formulas, compositions, techniques, articles and machines, as well as improvements thereof or “know-how” related thereto, relating at the time of conception or reduction to practice to the business engaged in by the Company, or any actual or anticipated research or development by the Company.

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4.1.5“Trade Secrets” shall mean any scientific or technical data, information, design, process, procedure, formula or improvement that is commercially available to the Company and is not generally known in the industry.

This Section includes not only information belonging to Company which existed before the date of this Agreement, but also information developed by Executive for Company or its employees during his employment and thereafter.

4.2Restriction on Use of Confidential Information. Executive agrees that his use of Trade Secrets and other Confidential Information is subject to the following restrictions during the term of the Agreement and for an indefinite period thereafter so long as the Trade Secrets and other Confidential Information have not become generally known to the public.

4.2.6Non-Disclosure. Except as required by the performance of the Executive’s services to the Company under the terms of this Agreement, Executive shall not, directly or indirectly disclose, or permit others to disclose the Company’s Trade Secrets, Confidential Information and/or Inventions as defined above.

4.2.7Return of Company Information. Upon termination of Executive’s employment with Company for any reason, Executive will surrender and return to Company all documents and materials in his possession or control which contain Trade Secrets, Inventions and other Confidential Information. Executive shall immediately return to the Company all lists, books, records, materials and documents, together with all copies thereof, and all other Company property in his possession or under his control, relating to or used in connection with the business of the Company. Executive acknowledges and agrees that all such lists, books, records, materials and documents, are the sole and exclusive property of the Company.

4.2.8Prohibition Against Unfair Competition. At any time after the termination of his employment with Company for any reason, Executive will not engage in competition with Company while making use of the Trade Secrets of Company.

4.3Patents and Inventions. Executive agrees that any Inventions made, conceived or completed by Executive during the term of Executive’s service, solely or jointly with others, which are made with the Company’s equipment, supplies, facilities or Confidential Information, or which relate at the time of conception or reduction to purpose of the Invention to the business of the Company or the Company’s actual or demonstrably anticipated research and development, or which result from any work performed by Executive for the Company, shall be the sole and exclusive property of the Company, and all Trade Secrets, Confidential Information, copyrightable works, works of authorship, and all patents, registrations or applications related thereto, all other intellectual property or proprietary information and all similar or related information (whether or not patentable and copyrightable and whether or not reduced to tangible form or practice) which relate to the business, research and development, or existing or future products or services of the Company and/or its subsidiaries and which are conceived, developed or made by Executive during Executive’s employment with the Company (“Work Product”) shall be deemed to be “work made for hire” (as defined in the Copyright Act, 17 U.S.C. §101 et seq., as amended) and owned exclusively by the Company. To the extent that any Work Product is not deemed to be a “work made for hire” under

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applicable law, and all right, title and interest in and to such Work Product have not automatically vested in the Company, Executive hereby (a) irrevocably assigns, transfers and conveys, and shall assign transfer and convey, to the fullest extent permitted by applicable law, all right, title and interest in and to the Work Product on a worldwide basis to the Company (or such other person or entity as the Company shall designate), without further consideration, and (b) waives all moral rights in or to all Work Product, and to the extent such rights may not be waived, agrees not to assert such rights against the Company or its respective licensees, successors, or assigns. In order to permit the Company to claim rights to which it may be entitled, Executive agrees to promptly disclose to the Company in confidence all Work Product which the Executive makes arising out of the Executive’s employment with the Company. Executive shall assist the Company in obtaining patents on all Work Product patentable by the Company in the United States and in all foreign countries, and shall execute all documents and do all things necessary to obtain letters patent, to vest the Company with full and extensive title thereto, and to protect the same against infringement by others.

5.TERMINATION OF EMPLOYMENT.

5.1Termination by Reason of Death or Disability. Executive’s employment hereunder shall terminate immediately upon the death of Executive. The Company may terminate this Agreement upon written notice to Executive if Executive suffers any physical or mental impairment or incapacity that results in Executive being unable to perform Executive’s essential duties, responsibilities and the functions of Executive’s position with the Company for periods aggregating one-hundred twenty (120) days in any three hundred sixty (360) day period (“Disability”).

5.2Termination by Company for Cause. The employment of Executive hereunder shall terminate immediately upon written notice delivered by the Company to the Executive of termination for “Cause”. “Cause” shall mean (i) Executive’s conviction (including any plea of guilty or no contest) of (x) any felony involving the embezzlement, theft or misappropriation of monies or other property, of the Company or otherwise; or (y) any crime of moral turpitude; (ii) gross misconduct in the performance of Executive’s duties; or (iii) the repeated failure by Executive (except by reason of Disability) to render full and proper services as required by the terms of Executive’s employment after failure to cure such failure within 30 days after receiving written notice from the Company or the Board of Directors detailing the alleged failure.

5.3Termination by the Company without Cause. The employment of Executive hereunder shall terminate immediately upon written notice delivered by the Company to the Executive of termination by the Company upon delivery to Executive of written notice of termination by the Company, which shall be deemed to be “without cause” unless termination is expressly stated to be pursuant to Section 5.1 or Section 5.2.

5.4Termination by the Executive for Good Reason. The employment of Executive hereunder shall terminate 30 days following the date on which Executive shall give the Company notice of termination for Good Reason (as hereinafter defined), or such earlier date as may be determined by the Company, the Compensation Committee or the Board of Directors. For purposes of this Agreement, “Good Reason” shall mean without Executive’s consent (i) a material diminution in the duties, authority or responsibilities of Executive or a material breach of this Agreement by

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the Company, or (ii) requiring Executive to relocate his principal place of employment to a location that is more than thirty-five (35) miles from the location of the Company’s principal office in the Oklahoma City area as of the Effective Date, provided that the Company fails to cure such material diminution, breach or relocation within 30 days of receipt of a written notice from Executive of such Good Reason event (which notice shall be provided by Executive to the Company within 90 days following the initial occurrence of such event). Executive’s Termination Date as a result of any of the foregoing events must occur within two (2) years of the initial occurrence of any such event.

6.PAYMENTS UPON TERMINATION.

6.1Termination Other Than For Cause. If Executive’s employment with the Company is terminated (i) by the Company other than for “Cause” (as defined herein), including if the Company provides notice of nonrenewal within 90 days of the end of the Initial Period or any Extension, (ii) by the Executive for Good Reason, or (iii) as a result of Executive’s Death or Disability (as provided in Section 5.1 herein), then:

6.1.1the Company shall provide Executive (or Executive’s estate, if applicable) (i) on the Termination Date (as such term is defined in Section 6.3), a lump sum payment equal to all accrued and unpaid salary and other compensation payable to Executive by the Company and all accrued and unpaid vacation and sick pay payable to Executive by the Company with respect to services rendered by Executive to the Company through the Termination Date; and (ii) subject to Section 6.1.5 and Section 10.10.5, a lump sum payment on the sixtieth (60^th) day following the Termination Date equal to the amount Executive would have earned as Base Salary and Minimum Annual Bonus during the two-year period following such date had Executive’s employment not been terminated, reduced by the fixed and determinable amount of any payments to be made to Executive during the two-year period following Executive’s termination under any long-term disability insurance policy maintained by the Company for Executive’s benefit; and

6.1.2subject to Section 6.1.5, (i) all restricted stock and restricted stock units that have been granted to Executive by the Company and that would have vested during the three-year period following the Termination Date solely as a result of Executive’s continued service to the Company will immediately vest on the Termination Date, and (ii) all stock options and stock appreciation rights that have been granted to Executive by the Company and that would have vested during the three-year period following the Termination Date solely as a result of Executive’s continued service to the Company will immediately vest and become exercisable on the Termination Date and will remain exercisable in accordance with the terms and conditions applicable to such equity award; and

6.1.3the Company will continue to provide Executive, during his lifetime, with the use of a Company provided automobile, as provided in Section 3.3.2, including payment of all insurance and maintenance costs, for 24 additional months;

6.1.4subject to Section 6.1.5, the Company will pay the cost for continuation coverage under the Company Group Health Plans (as defined herein, and to the extent permitted by applicable law and the terms of each Company Group Health Plan) under the Consolidated

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Omnibus Budget Reconciliation Act of 1985 (“COBRA”) for Executive and his eligible family members covered under the Company Group Health Plan immediately prior to Termination Date. Such premiums will be paid by the Company during the 18 month period immediately following Executive’s Termination Date or until Executive becomes eligible for group health plan benefits from another employer, whichever occurs first, provided that Executive timely elects COBRA coverage (“COBRA Benefits”) and provided that Executive’s continued participation is possible under the general terms and provisions of such Company Group Health Plans. Executive agrees to promptly inform the Company in writing if Executive becomes eligible to receive group health coverage from another employer. The period of such COBRA Benefits will be considered part of Executive’s COBRA coverage entitlement period. At the conclusion of the maximum 18 month period for which the Company will pay the cost of COBRA Benefits, as provided above, Executive may, at Executive’s sole expense, continue to receive COBRA Benefits for the remainder of the COBRA coverage entitlement period, if any, provided under the terms of the Company Group Health Plans; and

6.1.5notwithstanding anything herein to the contrary, it shall be a condition to Executive’s right to receive the amounts provided for in Section 3.2.1.2, Section 6.1.1, Section 6.1.2, Section 6.1.3 and Section 6.1.4, that Executive timely execute and deliver to the Company, a general release substantially in the form attached hereto as “Exhibit A” (the “General Release”) within twenty-one (21) days of its delivery to Executive (or such longer period as may be required under the Age Discrimination in Employment Act of 1967, as amended), without subsequent revocation of the General Release. Upon satisfaction of the General Release condition, the payment of the severance benefits will commence as provided in Section 6.1.1.

6.2Termination by the Company For Cause or by the Executive because of a Voluntary Termination. If Executive’s employment with the Company is terminated (i) by the Company for “Cause” (as defined herein), or (ii) by the Executive voluntarily other than for Good Reason, Executive will be entitled to receive on the Termination Date (as such term is defined in Section 6.3), a lump sum payment equal to all accrued and unpaid salary and other compensation payable to Executive by the Company and all accrued and unpaid vacation and sick pay payable to Executive by the Company with respect to services rendered by Executive to the Company through the Termination Date and, subject to the general release requirement in Section 3.2.1.2 and Section 6.1.5, the payment of a pro-rated Minimum Annual Bonus amount.

6.3Termination Date. For purposes of this Section 6, the term, “Termination Date” shall mean that date of Executive’s “separation from service” as that term is defined in Section 1.409A-1(h) of the Treasury Regulations.

6.4Timing of Payment. Notwithstanding anything to the contrary in this Agreement, to the extent required to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), if Executive is deemed by the Board of Directors (or its delegate), in its sole discretion, to be a “specified employee” for purposes of Section 409A(a)(2)(B) of the Code, Executive agrees that any non-qualified deferred compensation payments due to Executive under this Agreement in connection with a termination of Executive’s employment that would otherwise have been payable at any time during the six-month period immediately following such termination

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of employment shall not be paid prior to, and shall instead be payable in a lump sum on the first business day of the seventh month following Executive’s Termination Date.

7.CHANGE IN CONTROL.

7.1Notwithstanding the provisions of any other agreement to the contrary, if Executive’s employment with the Company or its successor is terminated on or before the second anniversary of the date of occurrence of a Change in Control (a) by the Company or its successor other than for Cause, (b) by the Executive for Good Reason, or (c) as a result of Executive’s death or disability, then, in addition to the benefits provided in Section 6.1 hereof, (i) all restricted stock and restricted stock units that have been granted to Executive by the Company and that would have vested at any time after the date of Executive’s termination solely as a result of Executive’s continued service to the Company will immediately vest on the date of termination; and (ii) all stock options and stock appreciation rights that have been granted to Executive by the Company and that would have vested at any time after the date of Executive’s termination solely as a result of Executive’s continued service to the Company will immediately vest and become exercisable on the date of termination.

7.2For purposes of this Section 7, a “Change in Control” of the Company will be deemed to have occurred if: (a) there shall be consummated (i) any consolidation or merger of the Company into or with another person (as such term is used in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) pursuant to which shares of the Company’s common stock would be converted into cash, securities or other property, other than any consolidation or merger of the Company in which the persons who were stockholders of the Company immediately prior to the consummation of such consolidation or merger are the beneficial owners (within the meaning of Rule 13d-3 under the Exchange Act), immediately following the consummation of such consolidation or merger, of more than 50% of the combined voting power of the then outstanding voting securities of the person surviving or resulting from such consolidation or merger, (ii) any sale, lease or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; (iii) any sale, lease or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company (i.e., more than 50% of the gross fair market value of the assets of the Company, determined without regard to any liabilities associated with such assets); or (iv) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the company.

8.INJUNCTIVE RELIEF.

Executive hereby recognizes, acknowledges and agrees that in the event of any breach by Executive of any of his covenants, agreements, duties or obligations hereunder, the Company would suffer great and irreparable harm, injury and damage, the Company would encounter extreme difficulty in attempting to prove the actual amount of damages suffered by the Company as a result of such breach, and the Company would not be reasonably or adequately compensated in damages in any action at law. Executive therefore agrees that, in addition to any other remedy the Company may have at law, in equity, by statute or otherwise, in the event of any breach by Executive of any of the covenants, agreements, duties or obligations hereunder, the Company or its subsidiaries shall be entitled to seek and receive temporary, preliminary and permanent injunctive and other equitable relief from any court of competent jurisdiction to enforce any of the rights of the Company or its

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subsidiaries or any of the covenants, agreements, duties or obligations of Executive hereunder, or otherwise to prevent the violation of any of the terms or provisions hereof, all without the necessity of proving the amount of any actual damage to the Company or its subsidiaries thereof resulting therefrom; provided, however, that nothing contained in this Section 8 shall be deemed or construed in any manner whatsoever as a waiver by the Company or its subsidiaries of any of the rights which any of them may have against Executive at law, in equity, by statute or otherwise arising out of, in connection with or resulting from the breach by Executive of any of his covenants, agreements, duties or obligations hereunder.

9.NON-SOLICITATION.

For so long as Executive is employed by the Company and continuing for twelve (12) months thereafter, Executive shall not, without the prior written consent of the Company, directly or indirectly, as a sole proprietor, member of a partnership, stockholder, or investor, officer or director of a corporation, or as an employee, associate, consultant or agent of any person, partnership, corporation or other business organization or entity other than the Company: (i) (x) solicit or endeavor to entice away from the Company, or any of its subsidiaries or affiliates, any person or entity who is employed by, or serves as an agent or key consultant of, the Company, or any of its subsidiaries or affiliates, or (y) solicit any person or entity who during the then most recent twelve (12) month period, was employed by or served as an agent or key consultant of the Company or any of its subsidiaries or affiliates, or (ii) endeavor to entice away from the Company or any of its subsidiaries or affiliates or solicit with respect to services then being rendered or planned, proposed or contemplated to be rendered by the Company or any such subsidiary or affiliate, any persons or entity who is, or was within the then most recent twelve (12) month period, a customer or client (or reasonably anticipated, to the general knowledge of Executive or the public, to become a customer or client) of the Company or any of its subsidiaries or affiliates.

10.MISCELLANEOUS.

10.1Entire Agreement. This Agreement contains the entire agreement of the parties regarding the employment of Executive by the Company and supersedes any prior agreement, arrangement or understanding, whether oral or written, between the Company and Executive concerning Executive’s employment hereunder.

10.2Notices. All notices, requests and other communications (collectively, “Notices”) given pursuant to this Agreement shall be in writing, and shall be delivered by facsimile transmission with a copy delivered by personal service or by United States first class, registered or certified mail (return receipt requested), postage prepaid, addressed to the party at the address set forth below:

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If to the Company:	Gulfport Energy Corporation 14313 North May Avenue, Suite 100 Oklahoma City, Oklahoma 73134 Attention: Board of Directors
If to Executive:	James D. Palm 14313 North May Avenue, Suite 100 Oklahoma City, Oklahoma 73134 or the Executive’s address in the Company’s personnel records

Any Notice shall be deemed duly given when received by the addressee thereof, provided that any Notice sent by registered or certified mail shall be deemed to have been duly given three days from date of deposit in the United States mails, unless sooner received. Either party may from time to time change its address for further Notices hereunder by giving notice to the other party in the manner prescribed in this Section 10.2.

10.3Governing Law. This Agreement has been made and entered into in the state of Oklahoma and shall be construed in accordance with the laws of the state of Oklahoma without regard to the conflict of laws principles thereof.

10.4Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

10.5Interpretation. The Compensation Committee or Board of Directors of the Company shall make all determinations under this Agreement and shall have the exclusive authority to interpret its terms and conditions. All determinations and interpretations made by the Compensation Committee or Board of Directors shall be final for all purposes and binding on the parties.

10.6Severable Provisions. The provisions of this Agreement are severable, and if any one or more provisions are determined to be judicially unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

10.7Successors and Assigns. This Agreement and all obligations and benefits of Executive and the Company hereunder shall bind and inure to the benefit of Executive and the Company, their respective affiliates, and their respective successors and assigns.

10.8Amendments and Waivers. No amendment or waiver of any term or provision of this Agreement shall be effective unless made in writing. Any written amendment or waiver shall be effective only in the instance given and then only with respect to the specific term or provision (or portion thereof) of this Agreement to which it expressly relates, and shall not be deemed or construed to constitute a waiver of any other term or provision (or portion thereof) waived in any other instance.

10.9Title and Headings. The titles and headings contained in this Agreement are included for convenience only and form no part of the agreement between the parties.

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10.10Compliance with Tax Rules for Nonqualified Deferred Compensation Plans. This Agreement is intended to comply with, or otherwise be exempt from, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and shall be administered, interpreted, and construed in a manner that does not result in the imposition on Executive of any additional tax, penalty, or interest under Section 409A of the Code.

10.10.1For purposes of Section 409A of the Code, the right to a series of installment payments under this Agreement will be treated as a right to a series of separate payments.

10.10.2Payment dates provided for in this Agreement will be deemed to incorporate grace periods that are treated as made upon a designated payment date as provided by Treasury Regulation §1.409A-3(d).

10.10.3If the Company determines in good faith that any provision of this Agreement would cause Executive to incur an additional tax, penalty, or interest under Section 409A of the Code, the Company and Executive shall use reasonable efforts to reform such provision, if possible, in a mutually agreeable fashion to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code. The preceding provisions, however, shall not be construed as a guarantee or warranty by the Company of any particular tax effect to Executive under this Agreement. The Company will not be liable to Executive for any payment made under this Agreement, at the direction or with the consent of Executive, that is determined to result in an additional tax, penalty, or interest under Section 409A of the Code, nor for reporting in good faith any payment made under this Agreement as an amount includible in gross income under Section 409A of the Code.

10.10.4“Termination of employment,” “Termination Date,” “date of termination” or words of similar import, as used in this Agreement mean, for purposes of any payments under this Agreement that are payments of deferred compensation subject to Section 409A of the Code, Executive’s “separation from service” as defined in Treasury Regulation § 1.409A-1(h).

10.10.5Payments under Section 6 and elsewhere in this Agreement will be administered and interpreted to maximize the exceptions to Code Section 409A for short-term deferrals and for separation pay due to involuntary separation from service. Any payment under this Agreement that is payable during the short-term deferral period (as described in Treasury Regulations §1.409A-1(b)(4)) or that is paid within the involuntary separation pay safe harbor (as described in Treasury Regulations §1.409A-1(b)(9)(iii)) will be treated as not providing for a deferral of compensation and will not be aggregated with any nonqualified deferred compensation plans or payments. The Severance Payments under Section 6 will commence on the date provided in Section 6.1.1, subject to the General Release requirement. It is intended that the Severance Payments will in all events commence 60 days following Executive’s Separation from Service, regardless of which taxable year Executive actually delivers the executed General Release to the Company. However, if the Severance Payments are deferred compensation subject to Code Section 409A and if the period during which Executive has discretion to execute or revoke the General Release required in Section 6.1.5 exceeds 60 days from the date of termination, the payments will commence on the eighth day following receipt by the Company of Executive’s executed General Release. If the period during

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which Executive has discretion to execute or revoke the General Release required in Section 6.1.5 straddles two taxable years of Executive, then the Company will commence the Severance Payments in the second of such taxable years. Executive may not, directly or indirectly, designate the calendar year of the commencement of any payment hereunder. Notwithstanding the foregoing, amounts payable hereunder which are not nonqualified deferred compensation, or which may be accelerated pursuant to Section 409A, such as distributions for applicable tax payments, may be accelerated, but not deferred, at the sole discretion of the Company.

10.10.6Notwithstanding anything to the contrary in this Agreement, to the extent required to comply with Section 409A of the Code, if Executive is deemed by the Board (or its delegate), in its sole discretion, to be a “specified employee” for purposes of Section 409A(a)(2)(B) of the Code, Executive agrees that any non-qualified deferred compensation payments due to Executive under this Agreement in connection with a termination of Executive’s employment that would otherwise have been payable at any time during the period immediately following such termination of employment and ending on the date that is six months after the Termination Date (or if earlier, Executive’s date of death) shall not be paid prior to, and shall instead be payable in a lump sum on the first business day following the end of such non-payment period.

10.11Survival. Notwithstanding anything to the contrary contained herein, the provisions of Section 4, Section 8, Section 9, and Section 10 shall survive the termination of this Agreement.

[Signatures on following page]

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IN WITNESS WHEREOF, each of the parties has signed this Agreement on the date opposite his signature below.

Date: November 7, 2012	THE “COMPANY” GULFPORT ENERGY CORPORATION By: /s/ Michael G. Moore Name: Michael G. Moore Its: Chief Financial Officer and Vice President
Date: November 7, 2012	THE “EXECUTIVE” /s/ James D. Palm James D. Palm, in his individual capacity

Signature page to Employment Agreement

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EXHIBIT A

GENERAL RELEASE OF ALL CLAIMS

This general release (this “Agreement”) is entered into pursuant to the terms and conditions of the Employment Agreement, originally dated November 7, 2012 (“Employment Agreement”), between James D. Palm (“Executive”) and Gulfport Energy Corporation (the “Company”). In exchange for and in consideration of the benefits described in the Employment Agreement (the “Severance Benefits”), Executive, on behalf of Executive and his agents, representatives, administrators, receivers, trustees, estates, heirs, devisees, assignees, legal representatives, and attorneys, past or present (as the case may be), hereby irrevocably and unconditionally releases, discharges, and acquits all the Released Parties (as defined below) from any and all claims, promises, demands, liabilities, contracts, debts, losses, damages, attorneys’ fees and causes of action of every kind and nature, known and unknown, asserted and unasserted, accrued or unaccrued, liquidated or contingent, direct or indirect up to the effective date of this Agreement, including but not limited to causes of action, claims or rights arising out of, or which might be considered to arise out of or to be connected in any way with (i) Executive’s employment with the Company or the termination thereof; (ii) Executive’s employment agreement, or offer letter or any other agreements between Executive and the Company or the termination thereof; (iii) any treatment of Executive by any of the Released Parties, which shall include, without limitation, any treatment or decisions with respect to hiring, placement, promotion, discipline, work hours, demotion, transfer, termination, compensation, performance review, or training; (iv) any statements or alleged statements by the Company or any of the Released Parties regarding Executive, whether oral or in writing; (v) any damages or injury that Executive may have suffered, including without limitation, emotional or physical injury, compensatory damages, or lost wages; or (vi) employment discrimination, which shall include, without limitation, any individual or class claims of discrimination on the basis of age, disability, sex, race, religion, national origin, citizenship status, marital status, sexual preference, or any other basis whatsoever.

Said release shall be construed as broadly as possible and shall also extend to release the Released Parties, without limitation, from any and all claims that Executive has alleged or could have alleged, whether known or unknown, accrued or unaccrued, against any Released Party for violation(s) of any of the following: the National Labor Relations Act, as amended; Title VII of the Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act; the Civil Rights Act of 1991; Sections 1981-1988 of Title 42 of the United States Code; the Equal Pay Act; the Employee Retirement Income Security Act of 1974, as amended; the Immigration Reform Control Act, as amended; the Americans with Disabilities Act of 1990, as amended; the Fair Labor Standards Act, as amended; the Occupational Safety and Health Act, as amended; any other federal, state, or local law or ordinance; any public policy, whistleblower, contract, tort, or common law; and any demand for costs or litigation expenses, except as otherwise provided in the Employment Agreement, including but not limited to attorneys’ fees.

The term “Released Parties” or “Released Party” as used herein shall mean and include: the Company and its parents, subsidiaries, affiliates, investors and all of their predecessors and successors (collectively, the “Released Entities”), and with respect to each such Released Entity, all of its former, current, and future officers, directors, agents, representatives, employees, servants, owners, shareholders, partners, joint venturers, investors, attorneys, insurers, administrators, and

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fiduciaries, and any other persons acting by, through, under, or in concert with any of the persons or entities listed herein.

Pursuant to the Older Workers Benefit Protection Act of 1990, Executive understands and acknowledges that by executing this Agreement and releasing all claims against any of the Released Parties, he has waived any and all rights or claims that he has or could have against any Released Party under the Age Discrimination in Employment Act, which includes any claim that any Released Party discriminated against Executive on account of his age. Executive also acknowledges the following:

(a)    The Company, by this written Agreement, has advised Executive to consult with an attorney prior to executing this Agreement;

(b)    Executive has had the opportunity to consult with his own attorney concerning this Agreement and Executive acknowledges that this Agreement is worded in an understandable way;

(c)    The rights and claims waived in this Agreement are in exchange for additional consideration over and above anything to which Executive was already undisputedly entitled;

(d)    This Agreement does not include claims arising after the Effective Date of this Agreement (as defined below), provided, however, that any claims arising after the Effective Date of this Agreement from the then-present effect of acts or conduct occurring before the Effective Date of this Agreement shall be deemed released under this Agreement; and

(e)    The Company has provided Executive the opportunity to review and consider this Agreement for twenty-one (21) days from the date Executive receives this Agreement. At Executive’s option and sole discretion, Executive may waive the twenty-one (21) day review period and execute this Agreement before the expiration of twenty-one (21) days. In electing to waive the twenty-one (21) day review period, Executive acknowledges and admits that he was given a reasonable period of time within which to consider this Agreement and his waiver is made freely and voluntarily, without duress or any coercion by any other person.

Executive may revoke this Agreement within a period of seven (7) days after execution of this Agreement. Executive agrees that any such revocation is not effective unless it is made in writing and delivered to the Company by the end of the seventh (7th) calendar day. Under any such valid revocation, Executive shall not be entitled to any severance pay or any other benefits under this Agreement. This Agreement becomes effective on the eighth (8th) calendar day after it is executed by both parties.

Executive confirms that no claim, charge, or complaint against any of the Released Parties, brought by him, exists before any federal, state, or local court or administrative agency. Executive hereby waives his right to accept any relief or recovery, including costs and attorney’s fees, from any charge or complaint before any federal, state, or local court or administrative agency against any of the Released Parties, except as such waiver is prohibited by law.

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The existence, terms, and conditions of this Agreement are and shall be deemed to be confidential and shall not hereafter be disclosed by Executive to any other person or entity, except (i) as may be required by law, regulation or applicable securities exchange requirements; and (ii) to Executive’s attorneys, spouse, accountants and/or financial advisors, provided that the person to whom disclosure is made is made aware of the confidentiality provisions of this Agreement and such person/s agrees to keep the terms of this Agreement confidential. Executive further agrees not to solicit or initiate any demand by others not party to this Agreement for any disclosure of the existence, terms, and conditions of this Agreement.

Executive agrees that he will not, unless otherwise prohibited by law, at any time hereafter, participate in as a party, or permit to be filed by any other person on his behalf or as a member of any alleged class of person, any action or proceeding of any kind, against the Company, or its past, present, or future parents, subsidiaries, divisions, affiliates, employee benefit and/or pension plans or funds, successors and assigns and any of their past, present or future directors, officers, agents, trustees, administrators, attorneys, employees or assigns (whether acting as agents for the Company or in their individual capacities), with respect to any act, omission, transaction or occurrence up to and including the date of the execution of this Agreement. Executive further agrees that he will not seek or accept any award or settlement from any source or proceeding with respect to any claim or right covered by this paragraph and that this Agreement shall act as a bar to recovery in any such proceedings.

Executive agrees that neither this Agreement nor the furnishing of the consideration set forth in this Agreement shall be deemed or construed at any time for any purpose as an admission by the Released Parties of any liability or unlawful conduct of any kind. Executive further acknowledges and agrees that the consideration provided for herein is adequate consideration for Executive’s obligations under this Agreement.

This Agreement shall be governed by and construed in accordance with the laws of the State of Oklahoma without regard to its conflicts of law provisions. If any provision of this Agreement other than the general release set forth above is declared legally or factually invalid or unenforceable by any court of competent jurisdiction and if such provision cannot be modified to be enforceable to any extent or in any application, then such provision immediately shall become null and void, leaving the remainder of this Agreement in full force and affect. If any portion of the general release set forth in this Agreement is declared to be unenforceable by a court of competent jurisdiction in any action in which Executive participates or joins, Executive agrees that all consideration paid to him under the Employment Agreement shall be offset against any monies that he may receive in connection with any such action.

This Agreement, together with the Employment Agreement, sets forth the entire agreement between Executive and the Released Parties and it supersedes any and all prior agreements or understandings, whether written or oral, between the parties, except as otherwise specified in this Agreement or the Employment Agreement. Executive acknowledges that he has not relied on any representations, promises, or agreements of any kind made to him in connection with his decision to sign this Agreement, except for those set forth in this Agreement.

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This Agreement may not be amended except by a written agreement signed by both parties, which specifically refers to this Agreement.

EXECUTIVE ACKNOWLEDGES THAT HE CAREFULLY HAS READ THIS AGREEMENT; THAT HE HAS HAD THE OPPORTUNITY TO THOROUGHLY DISCUSS ITS TERMS WITH COUNSEL OF HIS CHOOSING; THAT HE FULLY UNDERSTANDS ITS TERMS AND ITS FINAL AND BINDING EFFECT; THAT THE ONLY PROMISES MADE TO SIGN THIS AGREEMENT ARE THOSE STATED AND CONTAINED IN THIS AGREEMENT; AND THAT HE IS SIGNING THIS AGREEMENT KNOWINGLY AND VOLUNTARILY. EXECUTIVE STATES THAT HE IS IN GOOD HEALTH AND IS FULLY COMPETENT TO MANAGE HIS BUSINESS AFFAIRS AND UNDERSTANDS THAT HE MAY BE WAIVING SIGNIFICANT LEGAL RIGHTS BY SIGNING THIS AGREEMENT.

IN WITNESS WHEREOF, Executive has executed this Agreement as of the date set forth below.

AGREED AND ACCEPTED

__________________________

__________________

Date: _____________________

Sworn to and subscribed before me

this ____ day of _________, 20__

________________________________________Notary Public

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RECEIPT OF AGREEMENT

I acknowledge that I received today a copy of Gulfport Energy Corporation’s General Release of all Claims (the “Agreement”). I have been advised of the following:

1)    That I have twenty-one (21) days to consider the Agreement.

2)    I have the opportunity to discuss with Gulfport Energy Corporation any questions or concerns I may have regarding the terms or language of the Agreement.

3)    I have been advised to see an attorney of my choosing to review the Agreement.

4)    I should not sign the Agreement unless I fully understand its terms and, if I sign the Agreement, I do so of my own free will.

5)    I have seven (7) days after signing the Agreement to revoke the Agreement, and the Agreement shall not become effective, enforceable or binding until this revocation period has expired. Any revocation must be in writing and either postmarked and mailed to or hand-delivered to the Company within seven (7) days after I sign the Agreement.

6)    The Agreement does not waive any rights or claims that may arise after its execution.

7)    In consideration for signing the Agreement, I will be receiving Severance Benefits or benefits in addition to any monies I am already entitled to.

8)    No other promises have been made to me beyond the terms of the Employment Agreement and the Agreement.

Dated:    _____________            ________________________________

_____________

WITNESS:

Dated:_____________    ________________________________        Signature

________________________________    

Witness’ printed name and title

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WAIVER OF 21-DAY REVIEW PERIOD – OPTIONAL

I acknowledge that I was provided with a copy of Gulfport Energy Corporation’s General Release of all Claims (the “Agreement”) on ___________, I have had an opportunity to review the Agreement, have been afforded the opportunity to have it reviewed by an attorney of my choosing, and have made the voluntary decision to execute the Agreement prior to the expiration of the twenty-one (21) day review period. Therefore, I have executed the Agreement today, and I understand that I have seven (7) days from today to revoke the Agreement in writing. I further understand that the Agreement shall not become effective, enforceable, or binding until this revocation period has expired.

Dated:    _____________            ________________________________

_____________

WITNESS:

Dated:_____________    ________________________________        Signature

________________________________    

Witness’ printed name and title

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EX-10.6

Exhibit 10.6

EMPLOYMENT AGREEMENT

This Employment Agreement (the “Agreement”) is made and entered into November 7, 2012, by and between Gulfport Energy Corporation, a Delaware corporation (the “Company”), and Michael G. Moore, an individual (“Executive”).

RECITALS

WHEREAS, the Company is engaged in the exploration and development of crude oil and natural gas fields and related activities.

WHEREAS, Executive is and has been for some time a principal officer of Company, and is experienced in the management and conduct of the Company’s business.

WHEREAS, the Company desires to continue to employ Executive, and Executive desires to continue be employed by the Company, upon the terms and subject to the conditions set forth in this Agreement.

AGREEMENT

NOW, THEREFORE, in consideration of the foregoing recitals and the terms, covenants and conditions contained herein, the Company and Executive agree as follows:

1.EMPLOYMENT AND DUTIES.

1.1General. The Company hereby employs Executive, and Executive agrees to serve, as Chief Financial Officer, Vice President and Secretary of the Company, upon the terms and subject to the conditions set forth herein. Executive shall report directly to the Chief Executive Officer of the Company. Subject to the direction and control of the Chief Executive Officer, Executive shall have all the responsibilities and powers normally associated with such position and Executive shall perform such other duties and responsibilities as may be designated from time to time by the Chief Executive Officer.

1.2Exclusive Services. Executive shall devote his full business time, energy and efforts faithfully and diligently to promote the Company’s interests. Executive shall render his services exclusively to the Company during the Employment Term. The terms of this Section 1 shall not prevent Executive from investing or otherwise managing his assets in such form or manner as he chooses and spending such time, whether or not during business hours, as he deems necessary to manage his investments, so long as he is able to fulfill his duties pursuant to Section 1.1 above.

2.TERM.

Subject to the provisions for termination provided in Section 5, the term of Executive’s employment under this Agreement shall commence as of November 1, 2012 (the “Effective Date”) and shall terminate on the third anniversary of the Effective Date (the “Initial Period”); provided, however, that unless either party shall give written notice to the other party of an election not to extend or renew Executive’s employment hereunder at least ninety (90) days prior to the end of the

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Initial Period, or any anniversary thereof, the term of this Agreement shall automatically be extended by successive one-year periods (each an “Extension”). The term of this Agreement, including the Initial Period and any Extension, is hereinafter referred to as the “Employment Term.” Each 12 months period beginning on the Effective Date or any anniversary thereof and ending on the day prior to the anniversary thereof is hereinafter referred to as a “Contract Year.”

3.COMPENSATION.

3.1Base Salary. As compensation for services rendered under this Agreement, the Company shall pay to Executive a base salary (the “Base Salary”) at an annualized rate of $300,000 payable in accordance with the normal payroll procedures of the Company. From time to time at the sole discretion of the Compensation Committee (the “Compensation Committee”) of the Board of Directors of the Company (the “Board of Directors”), Executive’s Base Salary shall be reviewed by the Compensation Committee and/or the Board of Directors and may be increased, but not decreased, by the Compensation Committee or the Board of Directors in their sole discretion. The term “Base Salary” as used herein shall mean and refer to the then current base salary, as adjusted from time to time in accordance with this Section 3.1. The Company shall deduct from the Base Salary amounts sufficient to cover applicable federal, state and/or local income tax withholdings and any other amounts which the Company is required to withhold by applicable law.

3.2Bonuses.

3.2.1Annual Cash Bonus.

3.2.1.1In addition to Base Salary, Executive will be eligible, for each Contract Year during the Employment Term, to receive a discretionary cash bonus as determined by the Compensation Committee, if any, or to participate in any cash incentive plan then in existence and to receive an annual cash performance bonus (an “Annual Cash Bonus”) in accordance with the terms of such plan or plans; provided that the minimum annual bonus for each Contract Year during the Employment Term will not be less than $500,000 (the “Minimum Annual Bonus”). The amount of any such Annual Cash Bonuses (subject to the requirement to pay the Minimum Annual Bonus) and the annual target performance goals under any cash incentive plan that may be adopted during the Employment Term shall be determined by the Compensation Committee, in its sole discretion, and, subject to the Minimum Annual Bonus requirement, may be based on the Company’s fiscal year.

3.2.1.2If Executive’s employment with the Company is terminated (i) by the Company other than for “Cause” (as defined herein), including if the Company provides notice of nonrenewal within 90 days of the end of the Initial Period or any Extension, (ii) by the Executive for Good Reason, or (iii) as a result of Executive’s Death or Disability (as provided in Section 5.1 herein), then Executive (or Executive’s estate, if applicable) will be entitled to a pro-rated portion of the Minimum Annual Bonus based on the Minimum Annual Bonus multiplied by a fraction, the numerator of which will be the number of days in the Contract Year that have elapsed between the beginning of the Contract Year and the date of employment termination and the denominator of which will be the total number of days (365/366) in the Contract Year. The Executive’s right to receive payment of any pro-rated Minimum Annual Bonus for the year of termination will be

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contingent on Executive’s timely execution and delivery to the Company of a general release substantially in the form attached hereto as “Exhibit A” as described in Section 6.1.5 herein and will be subject to payment at the same time as the payments described in Section 6.1.1 that are conditioned upon execution and delivery of a general release.

3.2.2Equity Awards. In addition to the Base Salary, Executive will be eligible, for each fiscal year of the Company ending during the Employment Term, to participate in the Company’s Amended and Restated 2005 Stock Incentive Plan or such other equity incentive plan or plans then in existence for the benefit of employees, and may in the discretion of the Compensation Committee receive an equity award (an “Equity Award”), in accordance with the terms of such plan or plans. The timing and amount of such Equity Awards, any target performance goals and the vesting terms of such awards will be determined by the Compensation Committee in its sole discretion. Except as expressly set forth herein, any Equity Awards are pursuant to and will incorporate all terms and conditions of the Company’s Amended and Restated 2005 Stock Incentive Plan or such other equity incentive plan or plans then in existence for the benefit of employees, as applicable, and the Company’s standard form of award agreement. If Executive’s employment with the Company terminates prior to any scheduled vesting date then, except as expressly provided herein, Executive shall forfeit all rights and interests in and to such unvested Equity Awards.

3.3Benefits.

3.3.1Vacation. Executive shall be entitled to take up to four weeks paid vacation for each calendar year during Executive’s employment; provided, however, that vacation shall only be taken at such times as not to interfere with the necessary performance of Executive’s duties and obligations under this Agreement.

3.3.2Automobile. During the Employment Term, Executive shall be entitled to use of a Company provided automobile, including Company payment of all insurance and maintenance costs. Such automobile will be of a type consistent with the class of vehicle previously provided to Executive by the Company and will be replaced on a basis consistent with the Company’s previous replacement schedule.

3.3.3Other Benefits; Insurance. During the term of Executive’s employment under this Agreement, if and to the extent eligible, Executive shall be entitled to participate in all Company Group Health Plans then in effect, including, without limitation, any supplemental disability coverage available to similarly situated executive employees. For purposes of this Agreement, “Company Group Health Plans” means all operative medical, dental, group life, disability and accidental death and dismemberment insurance, all on the same basis generally applicable to similarly situated employees of the Company; provided, however, that nothing contained in this Agreement will, in any manner whatsoever, directly or indirectly, require or otherwise prohibit the Company from amending, modifying, curtailing, discontinuing, or otherwise terminating any Company Group Health Plan at any time (whether before or after the date of Executive’s termination). Executive will be eligible to receive life insurance coverage providing a death benefit of not less than $500,000.

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3.3.4Retirement Plans. During the term of Executive’s employment under this Agreement, if and to the extent eligible, Executive shall be entitled to participate in all Company Retirement Plans then in effect. For purposes of this Agreement, “Company Retirement Plans” means the Company’s 401(k) Profit Sharing Plan and all operative employee pension benefit plans (tax-qualified and nonqualified plans) that may in the future be sponsored or maintained by the Company, all on the same basis generally applicable to similarly situated employees of the Company; provided, however, that nothing contained in this Agreement will, in any manner whatsoever, directly or indirectly, require or otherwise prohibit the Company from amending, modifying, curtailing, discontinuing, or otherwise terminating any Company Retirement Plan at any time (whether before or after the date of Executive’s termination).

3.3.5Reimbursement. Executive shall be entitled to reimbursement from the Company for the reasonable costs and expenses incurred in connection with the performance of the duties and obligations provided for in this Agreement. Reimbursement shall be paid upon prompt presentation of expense statements or vouchers and such other supporting information as the Company may from time to time require.

4.TRADE SECRETS, CONFIDENTIAL INFORMATION AND INVENTIONS.

4.1Trade Secrets. During the course of Executive’s employment, Executive will have access to various trade secrets, confidential information and inventions of Company as defined below.

4.1.3“Confidential Information” means all information and material which is proprietary to the Company, whether or not marked as “confidential” or “proprietary” and which is disclosed to or obtained from the Company by the Executive, which relates to the Company’s past, present or future research, development or business activities. Confidential Information is all information or materials prepared by or for the Company and includes, without limitation, all of the following: designs, drawings, specifications, techniques, models, data, source code, object code, documentation, diagrams, flow charts, research, development, processes, systems, methods, machinery, procedures, “know-how”, new product or new technology information, formulas, patents, patent applications, product prototypes, product copies, cost of production, manufacturing, developing or marketing techniques and materials, cost of production, development or marketing time tables, customer lists, strategies related to customers, suppliers or personnel, contract forms, pricing policies and financial information, volumes of sales, and other information of similar nature, whether or not reduced to writing or other tangible form, and any other Trade Secrets, as defined by Section 4.1.3, or non-public business information.

4.1.4“Inventions” means all discoveries, concepts and ideas, whether patentable or not, including but not limited to, processes, methods, formulas, compositions, techniques, articles and machines, as well as improvements thereof or “know-how” related thereto, relating at the time of conception or reduction to practice to the business engaged in by the Company, or any actual or anticipated research or development by the Company.

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4.1.5“Trade Secrets” shall mean any scientific or technical data, information, design, process, procedure, formula or improvement that is commercially available to the Company and is not generally known in the industry.

This Section includes not only information belonging to Company which existed before the date of this Agreement, but also information developed by Executive for Company or its employees during his employment and thereafter.

4.2Restriction on Use of Confidential Information. Executive agrees that his use of Trade Secrets and other Confidential Information is subject to the following restrictions during the term of the Agreement and for an indefinite period thereafter so long as the Trade Secrets and other Confidential Information have not become generally known to the public.

4.2.6Non-Disclosure. Except as required by the performance of the Executive’s services to the Company under the terms of this Agreement, Executive shall not, directly or indirectly disclose, or permit others to disclose the Company’s Trade Secrets, Confidential Information and/or Inventions as defined above.

4.2.7Return of Company Information. Upon termination of Executive’s employment with Company for any reason, Executive will surrender and return to Company all documents and materials in his possession or control which contain Trade Secrets, Inventions and other Confidential Information. Executive shall immediately return to the Company all lists, books, records, materials and documents, together with all copies thereof, and all other Company property in his possession or under his control, relating to or used in connection with the business of the Company. Executive acknowledges and agrees that all such lists, books, records, materials and documents, are the sole and exclusive property of the Company.

4.2.8Prohibition Against Unfair Competition. At any time after the termination of his employment with Company for any reason, Executive will not engage in competition with Company while making use of the Trade Secrets of Company.

4.3Patents and Inventions. Executive agrees that any Inventions made, conceived or completed by Executive during the term of Executive’s service, solely or jointly with others, which are made with the Company’s equipment, supplies, facilities or Confidential Information, or which relate at the time of conception or reduction to purpose of the Invention to the business of the Company or the Company’s actual or demonstrably anticipated research and development, or which result from any work performed by Executive for the Company, shall be the sole and exclusive property of the Company, and all Trade Secrets, Confidential Information, copyrightable works, works of authorship, and all patents, registrations or applications related thereto, all other intellectual property or proprietary information and all similar or related information (whether or not patentable and copyrightable and whether or not reduced to tangible form or practice) which relate to the business, research and development, or existing or future products or services of the Company and/or its subsidiaries and which are conceived, developed or made by Executive during Executive’s employment with the Company (“Work Product”) shall be deemed to be “work made for hire” (as defined in the Copyright Act, 17 U.S.C. §101 et seq., as amended) and owned exclusively by the Company. To the extent that any Work Product is not deemed to be a “work made for hire” under

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applicable law, and all right, title and interest in and to such Work Product have not automatically vested in the Company, Executive hereby (a) irrevocably assigns, transfers and conveys, and shall assign transfer and convey, to the fullest extent permitted by applicable law, all right, title and interest in and to the Work Product on a worldwide basis to the Company (or such other person or entity as the Company shall designate), without further consideration, and (b) waives all moral rights in or to all Work Product, and to the extent such rights may not be waived, agrees not to assert such rights against the Company or its respective licensees, successors, or assigns. In order to permit the Company to claim rights to which it may be entitled, Executive agrees to promptly disclose to the Company in confidence all Work Product which the Executive makes arising out of the Executive’s employment with the Company. Executive shall assist the Company in obtaining patents on all Work Product patentable by the Company in the United States and in all foreign countries, and shall execute all documents and do all things necessary to obtain letters patent, to vest the Company with full and extensive title thereto, and to protect the same against infringement by others.

5.TERMINATION OF EMPLOYMENT.

5.1Termination by Reason of Death or Disability. Executive’s employment hereunder shall terminate immediately upon the death of Executive. The Company may terminate this Agreement upon written notice to Executive if Executive suffers any physical or mental impairment or incapacity that results in Executive being unable to perform Executive’s essential duties, responsibilities and the functions of Executive’s position with the Company for periods aggregating one-hundred twenty (120) days in any three hundred sixty (360) day period (“Disability”).

5.2Termination by Company for Cause. The employment of Executive hereunder shall terminate immediately upon written notice delivered by the Company to the Executive of termination for “Cause”. “Cause” shall mean (i) Executive’s conviction (including any plea of guilty or no contest) of (x) any felony involving the embezzlement, theft or misappropriation of monies or other property, of the Company or otherwise; or (y) any crime of moral turpitude; (ii) gross misconduct in the performance of Executive’s duties; or (iii) the repeated failure by Executive (except by reason of Disability) to render full and proper services as required by the terms of Executive’s employment after failure to cure such failure within 30 days after receiving written notice from the Company or the Board of Directors detailing the alleged failure.

5.3Termination by the Company without Cause. The employment of Executive hereunder shall terminate immediately upon written notice delivered by the Company to the Executive of termination by the Company upon delivery to Executive of written notice of termination by the Company, which shall be deemed to be “without cause” unless termination is expressly stated to be pursuant to Section 5.1 or Section 5.2.

5.4Termination by the Executive for Good Reason. The employment of Executive hereunder shall terminate 30 days following the date on which Executive shall give the Company notice of termination for Good Reason (as hereinafter defined), or such earlier date as may be determined by the Company, the Compensation Committee or the Board of Directors. For purposes of this Agreement, “Good Reason” shall mean without Executive’s consent (i) a material diminution in the duties, authority or responsibilities of Executive or a material breach of this Agreement by

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the Company, or (ii) requiring Executive to relocate his principal place of employment to a location that is more than thirty-five (35) miles from the location of the Company’s principal office in the Oklahoma City area as of the Effective Date, provided that the Company fails to cure such material diminution, breach or relocation within 30 days of receipt of a written notice from Executive of such Good Reason event (which notice shall be provided by Executive to the Company within 90 days following the initial occurrence of such event). Executive’s Termination Date as a result of any of the foregoing events must occur within two (2) years of the initial occurrence of any such event.

6.PAYMENTS UPON TERMINATION.

6.1Termination Other Than For Cause. If Executive’s employment with the Company is terminated (i) by the Company other than for “Cause” (as defined herein), including if the Company provides notice of nonrenewal within 90 days of the end of the Initial Period or any Extension, (ii) by the Executive for Good Reason, or (iii) as a result of Executive’s Death or Disability (as provided in Section 5.1 herein), then:

6.1.1the Company shall provide Executive (or Executive’s estate, if applicable) (i) on the Termination Date (as such term is defined in Section 6.3), a lump sum payment equal to all accrued and unpaid salary and other compensation payable to Executive by the Company and all accrued and unpaid vacation and sick pay payable to Executive by the Company with respect to services rendered by Executive to the Company through the Termination Date; and (ii) subject to Section 6.1.5 and Section 10.10.5, a lump sum payment on the sixtieth (60^th) day following the Termination Date equal to the amount Executive would have earned as Base Salary and Minimum Annual Bonus during the two-year period following such date had Executive’s employment not been terminated, reduced by the fixed and determinable amount of any payments to be made to Executive during the two-year period following Executive’s termination under any long-term disability insurance policy maintained by the Company for Executive’s benefit; and

6.1.2subject to Section 6.1.5, (i) all restricted stock and restricted stock units that have been granted to Executive by the Company and that would have vested during the three-year period following the Termination Date solely as a result of Executive’s continued service to the Company will immediately vest on the Termination Date, and (ii) all stock options and stock appreciation rights that have been granted to Executive by the Company and that would have vested during the three-year period following the Termination Date solely as a result of Executive’s continued service to the Company will immediately vest and become exercisable on the Termination Date and will remain exercisable in accordance with the terms and conditions applicable to such equity award; and

6.1.3the Company will continue to provide Executive, during his lifetime, with the use of a Company provided automobile, as provided in Section 3.3.2, including payment of all insurance and maintenance costs, for 24 additional months;

6.1.4subject to Section 6.1.5, the Company will pay the cost for continuation coverage under the Company Group Health Plans (as defined herein, and to the extent permitted by applicable law and the terms of each Company Group Health Plan) under the Consolidated

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Omnibus Budget Reconciliation Act of 1985 (“COBRA”) for Executive and his eligible family members covered under the Company Group Health Plan immediately prior to Termination Date. Such premiums will be paid by the Company during the 18 month period immediately following Executive’s Termination Date or until Executive becomes eligible for group health plan benefits from another employer, whichever occurs first, provided that Executive timely elects COBRA coverage (“COBRA Benefits”) and provided that Executive’s continued participation is possible under the general terms and provisions of such Company Group Health Plans. Executive agrees to promptly inform the Company in writing if Executive becomes eligible to receive group health coverage from another employer. The period of such COBRA Benefits will be considered part of Executive’s COBRA coverage entitlement period. At the conclusion of the maximum 18 month period for which the Company will pay the cost of COBRA Benefits, as provided above, Executive may, at Executive’s sole expense, continue to receive COBRA Benefits for the remainder of the COBRA coverage entitlement period, if any, provided under the terms of the Company Group Health Plans; and

6.1.5notwithstanding anything herein to the contrary, it shall be a condition to Executive’s right to receive the amounts provided for in Section 3.2.1.2, Section 6.1.1, Section 6.1.2, Section 6.1.3 and Section 6.1.4, that Executive timely execute and deliver to the Company, a general release substantially in the form attached hereto as “Exhibit A” (the “General Release”) within twenty-one (21) days of its delivery to Executive (or such longer period as may be required under the Age Discrimination in Employment Act of 1967, as amended), without subsequent revocation of the General Release. Upon satisfaction of the General Release condition, the payment of the severance benefits will commence as provided in Section 6.1.1.

6.2Termination by the Company For Cause or by the Executive because of a Voluntary Termination. If Executive’s employment with the Company is terminated (i) by the Company for “Cause” (as defined herein), or (ii) by the Executive voluntarily other than for Good Reason, Executive will be entitled to receive on the Termination Date (as such term is defined in Section 6.3), a lump sum payment equal to all accrued and unpaid salary and other compensation payable to Executive by the Company and all accrued and unpaid vacation and sick pay payable to Executive by the Company with respect to services rendered by Executive to the Company through the Termination Date and, subject to the general release requirement in Section 3.2.1.2 and Section 6.1.5, the payment of a pro-rated Minimum Annual Bonus amount.

6.3Termination Date. For purposes of this Section 6, the term, “Termination Date” shall mean that date of Executive’s “separation from service” as that term is defined in Section 1.409A-1(h) of the Treasury Regulations.

6.4Timing of Payment. Notwithstanding anything to the contrary in this Agreement, to the extent required to comply with Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), if Executive is deemed by the Board of Directors (or its delegate), in its sole discretion, to be a “specified employee” for purposes of Section 409A(a)(2)(B) of the Code, Executive agrees that any non-qualified deferred compensation payments due to Executive under this Agreement in connection with a termination of Executive’s employment that would otherwise have been payable at any time during the six-month period immediately following such termination

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of employment shall not be paid prior to, and shall instead be payable in a lump sum on the first business day of the seventh month following Executive’s Termination Date.

7.CHANGE IN CONTROL.

7.1Notwithstanding the provisions of any other agreement to the contrary, if Executive’s employment with the Company or its successor is terminated on or before the second anniversary of the date of occurrence of a Change in Control (a) by the Company or its successor other than for Cause, (b) by the Executive for Good Reason, or (c) as a result of Executive’s death or disability, then, in addition to the benefits provided in Section 6.1 hereof, (i) all restricted stock and restricted stock units that have been granted to Executive by the Company and that would have vested at any time after the date of Executive’s termination solely as a result of Executive’s continued service to the Company will immediately vest on the date of termination; and (ii) all stock options and stock appreciation rights that have been granted to Executive by the Company and that would have vested at any time after the date of Executive’s termination solely as a result of Executive’s continued service to the Company will immediately vest and become exercisable on the date of termination.

7.2For purposes of this Section 7, a “Change in Control” of the Company will be deemed to have occurred if: (a) there shall be consummated (i) any consolidation or merger of the Company into or with another person (as such term is used in Sections 13(d)(3) and 14(d)(2) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”)) pursuant to which shares of the Company’s common stock would be converted into cash, securities or other property, other than any consolidation or merger of the Company in which the persons who were stockholders of the Company immediately prior to the consummation of such consolidation or merger are the beneficial owners (within the meaning of Rule 13d-3 under the Exchange Act), immediately following the consummation of such consolidation or merger, of more than 50% of the combined voting power of the then outstanding voting securities of the person surviving or resulting from such consolidation or merger, (ii) any sale, lease or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company; (iii) any sale, lease or other transfer (in one transaction or a series of related transactions) of all or substantially all of the assets of the Company (i.e., more than 50% of the gross fair market value of the assets of the Company, determined without regard to any liabilities associated with such assets); or (iv) the stockholders of the Company approve any plan or proposal for the liquidation or dissolution of the company.

8.INJUNCTIVE RELIEF.

Executive hereby recognizes, acknowledges and agrees that in the event of any breach by Executive of any of his covenants, agreements, duties or obligations hereunder, the Company would suffer great and irreparable harm, injury and damage, the Company would encounter extreme difficulty in attempting to prove the actual amount of damages suffered by the Company as a result of such breach, and the Company would not be reasonably or adequately compensated in damages in any action at law. Executive therefore agrees that, in addition to any other remedy the Company may have at law, in equity, by statute or otherwise, in the event of any breach by Executive of any of the covenants, agreements, duties or obligations hereunder, the Company or its subsidiaries shall be entitled to seek and receive temporary, preliminary and permanent injunctive and other equitable relief from any court of competent jurisdiction to enforce any of the rights of the Company or its

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subsidiaries or any of the covenants, agreements, duties or obligations of Executive hereunder, or otherwise to prevent the violation of any of the terms or provisions hereof, all without the necessity of proving the amount of any actual damage to the Company or its subsidiaries thereof resulting therefrom; provided, however, that nothing contained in this Section 8 shall be deemed or construed in any manner whatsoever as a waiver by the Company or its subsidiaries of any of the rights which any of them may have against Executive at law, in equity, by statute or otherwise arising out of, in connection with or resulting from the breach by Executive of any of his covenants, agreements, duties or obligations hereunder.

9.NON-SOLICITATION.

For so long as Executive is employed by the Company and continuing for twelve (12) months thereafter, Executive shall not, without the prior written consent of the Company, directly or indirectly, as a sole proprietor, member of a partnership, stockholder, or investor, officer or director of a corporation, or as an employee, associate, consultant or agent of any person, partnership, corporation or other business organization or entity other than the Company: (i) (x) solicit or endeavor to entice away from the Company, or any of its subsidiaries or affiliates, any person or entity who is employed by, or serves as an agent or key consultant of, the Company, or any of its subsidiaries or affiliates, or (y) solicit any person or entity who during the then most recent twelve (12) month period, was employed by or served as an agent or key consultant of the Company or any of its subsidiaries or affiliates, or (ii) endeavor to entice away from the Company or any of its subsidiaries or affiliates or solicit with respect to services then being rendered or planned, proposed or contemplated to be rendered by the Company or any such subsidiary or affiliate, any persons or entity who is, or was within the then most recent twelve (12) month period, a customer or client (or reasonably anticipated, to the general knowledge of Executive or the public, to become a customer or client) of the Company or any of its subsidiaries or affiliates.

10.MISCELLANEOUS.

10.1Entire Agreement. This Agreement contains the entire agreement of the parties regarding the employment of Executive by the Company and supersedes any prior agreement, arrangement or understanding, whether oral or written, between the Company and Executive concerning Executive’s employment hereunder.

10.2Notices. All notices, requests and other communications (collectively, “Notices”) given pursuant to this Agreement shall be in writing, and shall be delivered by facsimile transmission with a copy delivered by personal service or by United States first class, registered or certified mail (return receipt requested), postage prepaid, addressed to the party at the address set forth below:

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If to the Company:	Gulfport Energy Corporation 14313 North May Avenue, Suite 100 Oklahoma City, Oklahoma 73134 Attention: Board of Directors
If to Executive:	Michael G. Moore 14313 North May Avenue, Suite 100 Oklahoma City, Oklahoma 73134 or the Executive’s address in the Company’s personnel records

Any Notice shall be deemed duly given when received by the addressee thereof, provided that any Notice sent by registered or certified mail shall be deemed to have been duly given three days from date of deposit in the United States mails, unless sooner received. Either party may from time to time change its address for further Notices hereunder by giving notice to the other party in the manner prescribed in this Section 10.2.

10.3Governing Law. This Agreement has been made and entered into in the state of Oklahoma and shall be construed in accordance with the laws of the state of Oklahoma without regard to the conflict of laws principles thereof.

10.4Counterparts. This Agreement may be executed in any number of counterparts, each of which shall be deemed to be an original, but all of which together shall constitute one and the same instrument.

10.5Interpretation. The Compensation Committee or Board of Directors of the Company shall make all determinations under this Agreement and shall have the exclusive authority to interpret its terms and conditions. All determinations and interpretations made by the Compensation Committee or Board of Directors shall be final for all purposes and binding on the parties.

10.6Severable Provisions. The provisions of this Agreement are severable, and if any one or more provisions are determined to be judicially unenforceable, in whole or in part, the remaining provisions shall nevertheless be binding and enforceable.

10.7Successors and Assigns. This Agreement and all obligations and benefits of Executive and the Company hereunder shall bind and inure to the benefit of Executive and the Company, their respective affiliates, and their respective successors and assigns.

10.8Amendments and Waivers. No amendment or waiver of any term or provision of this Agreement shall be effective unless made in writing. Any written amendment or waiver shall be effective only in the instance given and then only with respect to the specific term or provision (or portion thereof) of this Agreement to which it expressly relates, and shall not be deemed or construed to constitute a waiver of any other term or provision (or portion thereof) waived in any other instance.

10.9Title and Headings. The titles and headings contained in this Agreement are included for convenience only and form no part of the agreement between the parties.

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10.10Compliance with Tax Rules for Nonqualified Deferred Compensation Plans. This Agreement is intended to comply with, or otherwise be exempt from, Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”) and shall be administered, interpreted, and construed in a manner that does not result in the imposition on Executive of any additional tax, penalty, or interest under Section 409A of the Code.

10.10.1For purposes of Section 409A of the Code, the right to a series of installment payments under this Agreement will be treated as a right to a series of separate payments.

10.10.2Payment dates provided for in this Agreement will be deemed to incorporate grace periods that are treated as made upon a designated payment date as provided by Treasury Regulation §1.409A-3(d).

10.10.3If the Company determines in good faith that any provision of this Agreement would cause Executive to incur an additional tax, penalty, or interest under Section 409A of the Code, the Company and Executive shall use reasonable efforts to reform such provision, if possible, in a mutually agreeable fashion to maintain to the maximum extent practicable the original intent of the applicable provision without violating the provisions of Section 409A of the Code. The preceding provisions, however, shall not be construed as a guarantee or warranty by the Company of any particular tax effect to Executive under this Agreement. The Company will not be liable to Executive for any payment made under this Agreement, at the direction or with the consent of Executive, that is determined to result in an additional tax, penalty, or interest under Section 409A of the Code, nor for reporting in good faith any payment made under this Agreement as an amount includible in gross income under Section 409A of the Code.

10.10.4“Termination of employment,” “Termination Date,” “date of termination” or words of similar import, as used in this Agreement mean, for purposes of any payments under this Agreement that are payments of deferred compensation subject to Section 409A of the Code, Executive’s “separation from service” as defined in Treasury Regulation § 1.409A-1(h).

10.10.5Payments under Section 6 and elsewhere in this Agreement will be administered and interpreted to maximize the exceptions to Code Section 409A for short-term deferrals and for separation pay due to involuntary separation from service. Any payment under this Agreement that is payable during the short-term deferral period (as described in Treasury Regulations §1.409A-1(b)(4)) or that is paid within the involuntary separation pay safe harbor (as described in Treasury Regulations §1.409A-1(b)(9)(iii)) will be treated as not providing for a deferral of compensation and will not be aggregated with any nonqualified deferred compensation plans or payments. The Severance Payments under Section 6 will commence on the date provided in Section 6.1.1, subject to the General Release requirement. It is intended that the Severance Payments will in all events commence 60 days following Executive’s Separation from Service, regardless of which taxable year Executive actually delivers the executed General Release to the Company. However, if the Severance Payments are deferred compensation subject to Code Section 409A and if the period during which Executive has discretion to execute or revoke the General Release required in Section 6.1.5 exceeds 60 days from the date of termination, the payments will commence on the eighth day following receipt by the Company of Executive’s executed General Release. If the period during

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which Executive has discretion to execute or revoke the General Release required in Section 6.1.5 straddles two taxable years of Executive, then the Company will commence the Severance Payments in the second of such taxable years. Executive may not, directly or indirectly, designate the calendar year of the commencement of any payment hereunder. Notwithstanding the foregoing, amounts payable hereunder which are not nonqualified deferred compensation, or which may be accelerated pursuant to Section 409A, such as distributions for applicable tax payments, may be accelerated, but not deferred, at the sole discretion of the Company.

10.10.6Notwithstanding anything to the contrary in this Agreement, to the extent required to comply with Section 409A of the Code, if Executive is deemed by the Board (or its delegate), in its sole discretion, to be a “specified employee” for purposes of Section 409A(a)(2)(B) of the Code, Executive agrees that any non-qualified deferred compensation payments due to Executive under this Agreement in connection with a termination of Executive’s employment that would otherwise have been payable at any time during the period immediately following such termination of employment and ending on the date that is six months after the Termination Date (or if earlier, Executive’s date of death) shall not be paid prior to, and shall instead be payable in a lump sum on the first business day following the end of such non-payment period.

10.11Survival. Notwithstanding anything to the contrary contained herein, the provisions of Section 4, Section 8, Section 9, and Section 10 shall survive the termination of this Agreement.

[Signatures on following page]

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IN WITNESS WHEREOF, each of the parties has signed this Agreement on the date opposite his signature below.

Date: November 7, 2012	THE “COMPANY” GULFPORT ENERGY CORPORATION By: /s/ James D. Palm Name:  James D. Palm Its: Chief Executive Officer
Date: November 7, 2012	THE “EXECUTIVE” /s/ Michael G. Moore Michael G. Moore, in his individual capacity

Signature page to Employment Agreement

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EXHIBIT A

GENERAL RELEASE OF ALL CLAIMS

This general release (this “Agreement”) is entered into pursuant to the terms and conditions of the Employment Agreement, originally dated November 7, 2012 (“Employment Agreement”), between Michael G. Moore (“Executive”) and Gulfport Energy Corporation (the “Company”). In exchange for and in consideration of the benefits described in the Employment Agreement (the “Severance Benefits”), Executive, on behalf of Executive and his agents, representatives, administrators, receivers, trustees, estates, heirs, devisees, assignees, legal representatives, and attorneys, past or present (as the case may be), hereby irrevocably and unconditionally releases, discharges, and acquits all the Released Parties (as defined below) from any and all claims, promises, demands, liabilities, contracts, debts, losses, damages, attorneys’ fees and causes of action of every kind and nature, known and unknown, asserted and unasserted, accrued or unaccrued, liquidated or contingent, direct or indirect up to the effective date of this Agreement, including but not limited to causes of action, claims or rights arising out of, or which might be considered to arise out of or to be connected in any way with (i) Executive’s employment with the Company or the termination thereof; (ii) Executive’s employment agreement, or offer letter or any other agreements between Executive and the Company or the termination thereof; (iii) any treatment of Executive by any of the Released Parties, which shall include, without limitation, any treatment or decisions with respect to hiring, placement, promotion, discipline, work hours, demotion, transfer, termination, compensation, performance review, or training; (iv) any statements or alleged statements by the Company or any of the Released Parties regarding Executive, whether oral or in writing; (v) any damages or injury that Executive may have suffered, including without limitation, emotional or physical injury, compensatory damages, or lost wages; or (vi) employment discrimination, which shall include, without limitation, any individual or class claims of discrimination on the basis of age, disability, sex, race, religion, national origin, citizenship status, marital status, sexual preference, or any other basis whatsoever.

Said release shall be construed as broadly as possible and shall also extend to release the Released Parties, without limitation, from any and all claims that Executive has alleged or could have alleged, whether known or unknown, accrued or unaccrued, against any Released Party for violation(s) of any of the following: the National Labor Relations Act, as amended; Title VII of the Civil Rights Act of 1964, as amended; the Age Discrimination in Employment Act; the Civil Rights Act of 1991; Sections 1981-1988 of Title 42 of the United States Code; the Equal Pay Act; the Employee Retirement Income Security Act of 1974, as amended; the Immigration Reform Control Act, as amended; the Americans with Disabilities Act of 1990, as amended; the Fair Labor Standards Act, as amended; the Occupational Safety and Health Act, as amended; any other federal, state, or local law or ordinance; any public policy, whistleblower, contract, tort, or common law; and any demand for costs or litigation expenses, except as otherwise provided in the Employment Agreement, including but not limited to attorneys’ fees.

The term “Released Parties” or “Released Party” as used herein shall mean and include: the Company and its parents, subsidiaries, affiliates, investors and all of their predecessors and successors (collectively, the “Released Entities”), and with respect to each such Released Entity, all of its former, current, and future officers, directors, agents, representatives, employees, servants, owners, shareholders, partners, joint venturers, investors, attorneys, insurers, administrators, and

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fiduciaries, and any other persons acting by, through, under, or in concert with any of the persons or entities listed herein.

Pursuant to the Older Workers Benefit Protection Act of 1990, Executive understands and acknowledges that by executing this Agreement and releasing all claims against any of the Released Parties, he has waived any and all rights or claims that he has or could have against any Released Party under the Age Discrimination in Employment Act, which includes any claim that any Released Party discriminated against Executive on account of his age. Executive also acknowledges the following:

(a)    The Company, by this written Agreement, has advised Executive to consult with an attorney prior to executing this Agreement;

(b)    Executive has had the opportunity to consult with his own attorney concerning this Agreement and Executive acknowledges that this Agreement is worded in an understandable way;

(c)    The rights and claims waived in this Agreement are in exchange for additional consideration over and above anything to which Executive was already undisputedly entitled;

(d)    This Agreement does not include claims arising after the Effective Date of this Agreement (as defined below), provided, however, that any claims arising after the Effective Date of this Agreement from the then-present effect of acts or conduct occurring before the Effective Date of this Agreement shall be deemed released under this Agreement; and

(e)    The Company has provided Executive the opportunity to review and consider this Agreement for twenty-one (21) days from the date Executive receives this Agreement. At Executive’s option and sole discretion, Executive may waive the twenty-one (21) day review period and execute this Agreement before the expiration of twenty-one (21) days. In electing to waive the twenty-one (21) day review period, Executive acknowledges and admits that he was given a reasonable period of time within which to consider this Agreement and his waiver is made freely and voluntarily, without duress or any coercion by any other person.

Executive may revoke this Agreement within a period of seven (7) days after execution of this Agreement. Executive agrees that any such revocation is not effective unless it is made in writing and delivered to the Company by the end of the seventh (7th) calendar day. Under any such valid revocation, Executive shall not be entitled to any severance pay or any other benefits under this Agreement. This Agreement becomes effective on the eighth (8th) calendar day after it is executed by both parties.

Executive confirms that no claim, charge, or complaint against any of the Released Parties, brought by him, exists before any federal, state, or local court or administrative agency. Executive hereby waives his right to accept any relief or recovery, including costs and attorney’s fees, from any charge or complaint before any federal, state, or local court or administrative agency against any of the Released Parties, except as such waiver is prohibited by law.

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The existence, terms, and conditions of this Agreement are and shall be deemed to be confidential and shall not hereafter be disclosed by Executive to any other person or entity, except (i) as may be required by law, regulation or applicable securities exchange requirements; and (ii) to Executive’s attorneys, spouse, accountants and/or financial advisors, provided that the person to whom disclosure is made is made aware of the confidentiality provisions of this Agreement and such person/s agrees to keep the terms of this Agreement confidential. Executive further agrees not to solicit or initiate any demand by others not party to this Agreement for any disclosure of the existence, terms, and conditions of this Agreement.

Executive agrees that he will not, unless otherwise prohibited by law, at any time hereafter, participate in as a party, or permit to be filed by any other person on his behalf or as a member of any alleged class of person, any action or proceeding of any kind, against the Company, or its past, present, or future parents, subsidiaries, divisions, affiliates, employee benefit and/or pension plans or funds, successors and assigns and any of their past, present or future directors, officers, agents, trustees, administrators, attorneys, employees or assigns (whether acting as agents for the Company or in their individual capacities), with respect to any act, omission, transaction or occurrence up to and including the date of the execution of this Agreement. Executive further agrees that he will not seek or accept any award or settlement from any source or proceeding with respect to any claim or right covered by this paragraph and that this Agreement shall act as a bar to recovery in any such proceedings.

Executive agrees that neither this Agreement nor the furnishing of the consideration set forth in this Agreement shall be deemed or construed at any time for any purpose as an admission by the Released Parties of any liability or unlawful conduct of any kind. Executive further acknowledges and agrees that the consideration provided for herein is adequate consideration for Executive’s obligations under this Agreement.

This Agreement shall be governed by and construed in accordance with the laws of the State of Oklahoma without regard to its conflicts of law provisions. If any provision of this Agreement other than the general release set forth above is declared legally or factually invalid or unenforceable by any court of competent jurisdiction and if such provision cannot be modified to be enforceable to any extent or in any application, then such provision immediately shall become null and void, leaving the remainder of this Agreement in full force and affect. If any portion of the general release set forth in this Agreement is declared to be unenforceable by a court of competent jurisdiction in any action in which Executive participates or joins, Executive agrees that all consideration paid to him under the Employment Agreement shall be offset against any monies that he may receive in connection with any such action.

This Agreement, together with the Employment Agreement, sets forth the entire agreement between Executive and the Released Parties and it supersedes any and all prior agreements or understandings, whether written or oral, between the parties, except as otherwise specified in this Agreement or the Employment Agreement. Executive acknowledges that he has not relied on any representations, promises, or agreements of any kind made to him in connection with his decision to sign this Agreement, except for those set forth in this Agreement.

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This Agreement may not be amended except by a written agreement signed by both parties, which specifically refers to this Agreement.

EXECUTIVE ACKNOWLEDGES THAT HE CAREFULLY HAS READ THIS AGREEMENT; THAT HE HAS HAD THE OPPORTUNITY TO THOROUGHLY DISCUSS ITS TERMS WITH COUNSEL OF HIS CHOOSING; THAT HE FULLY UNDERSTANDS ITS TERMS AND ITS FINAL AND BINDING EFFECT; THAT THE ONLY PROMISES MADE TO SIGN THIS AGREEMENT ARE THOSE STATED AND CONTAINED IN THIS AGREEMENT; AND THAT HE IS SIGNING THIS AGREEMENT KNOWINGLY AND VOLUNTARILY. EXECUTIVE STATES THAT HE IS IN GOOD HEALTH AND IS FULLY COMPETENT TO MANAGE HIS BUSINESS AFFAIRS AND UNDERSTANDS THAT HE MAY BE WAIVING SIGNIFICANT LEGAL RIGHTS BY SIGNING THIS AGREEMENT.

IN WITNESS WHEREOF, Executive has executed this Agreement as of the date set forth below.

AGREED AND ACCEPTED

__________________________

__________________

Date: _____________________

Sworn to and subscribed before me

this ____ day of _________, 20__

________________________________________Notary Public

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RECEIPT OF AGREEMENT

I acknowledge that I received today a copy of Gulfport Energy Corporation’s General Release of all Claims (the “Agreement”). I have been advised of the following:

1)    That I have twenty-one (21) days to consider the Agreement.

2)    I have the opportunity to discuss with Gulfport Energy Corporation any questions or concerns I may have regarding the terms or language of the Agreement.

3)    I have been advised to see an attorney of my choosing to review the Agreement.

4)    I should not sign the Agreement unless I fully understand its terms and, if I sign the Agreement, I do so of my own free will.

5)    I have seven (7) days after signing the Agreement to revoke the Agreement, and the Agreement shall not become effective, enforceable or binding until this revocation period has expired. Any revocation must be in writing and either postmarked and mailed to or hand-delivered to the Company within seven (7) days after I sign the Agreement.

6)    The Agreement does not waive any rights or claims that may arise after its execution.

7)    In consideration for signing the Agreement, I will be receiving Severance Benefits or benefits in addition to any monies I am already entitled to.

8)    No other promises have been made to me beyond the terms of the Employment Agreement and the Agreement.

Dated:    _____________            ________________________________

_____________

WITNESS:

Dated:_____________    ________________________________        Signature

________________________________    

Witness’ printed name and title

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WAIVER OF 21-DAY REVIEW PERIOD – OPTIONAL

I acknowledge that I was provided with a copy of Gulfport Energy Corporation’s General Release of all Claims (the “Agreement”) on ___________, I have had an opportunity to review the Agreement, have been afforded the opportunity to have it reviewed by an attorney of my choosing, and have made the voluntary decision to execute the Agreement prior to the expiration of the twenty-one (21) day review period. Therefore, I have executed the Agreement today, and I understand that I have seven (7) days from today to revoke the Agreement in writing. I further understand that the Agreement shall not become effective, enforceable, or binding until this revocation period has expired.

Dated:    _____________            ________________________________

_____________

WITNESS:

Dated:_____________    ________________________________        Signature

________________________________    

Witness’ printed name and title

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EX-31.1

Exhibit 31.1

CERTIFICATION

I, James D. Palm, Chief Executive Officer of Gulfport Energy Corporation, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Gulfport Energy Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: November 8, 2012

/s/ James D. Palm

James D. Palm

Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Michael G. Moore, Chief Financial Officer of Gulfport Energy Corporation, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Gulfport Energy Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: November 8, 2012

/s/ Michael G. Moore

Michael G. Moore

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF PERIODIC REPORT

I, James D. Palm, Chief Executive Officer of Gulfport Energy Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to the best of my knowledge:

(1) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2012 (the “Report”) fully complies with the requirements of Section 13 (a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 8, 2012

/s/ James D. Palm

James D. Palm

Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF PERIODIC REPORT

I, Michael G. Moore, Chief Financial Officer of Gulfport Energy Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to the best of my knowledge:

(1) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2012 (the “Report”) fully complies with the requirements of Section 13 (a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 8, 2012

/s/ Michael G. Moore

Michael G. Moore

Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

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Long-Term Debt (Narrative) (Details) (USD $)	9 Months Ended													9 Months Ended							1 Months Ended	9 Months Ended
	Sep. 30, 2012		Oct. 16, 2012	Oct. 17, 2012	Oct. 09, 2012	May 02, 2012	Dec. 31, 2011		Oct. 31, 2011	May 03, 2011	Dec. 24, 2010 Bank Of Nova Scotia [Member]	Sep. 30, 2010 Bank Of Nova Scotia [Member]	Sep. 30, 2012 Federal Funds Rate [Member]	Sep. 30, 2012 One-Month Euro Dollar Rate [Member]	Sep. 30, 2012 Maximum [Member]	Sep. 30, 2012 Minimum [Member]	Sep. 30, 2012 Euro Dollar Loans [Member]	Oct. 16, 2012 Euro Dollar Loans [Member]	Sep. 30, 2012 Base Rate Loans [Member]	Oct. 16, 2012 Base Rate Loans [Member]	Mar. 31, 2011 Building Loan [Member]	Sep. 30, 2012 Building Loan [Member]
Debt Instrument [Line Items]
Revolving credit facility										$ 350,000,000		$ 100,000,000
Borrowing capacity				45,000,000		155,000,000			125,000,000	90,000,000	65,000,000	50,000,000
Company's borrowings, outstanding principal amount	141,000,000	[1]						[1]
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Minimum																	1.75%	2.00%	0.75%	1.00%
Debt Instrument, Interest Rate, Stated Percentage Rate Range, Maximum																	2.50%	2.75%	1.50%	1.75%
Line of Credit Facility, Commitment Fee Percentage	0.50%		0.375%
Loan, periodic monthly payment																						22,000
Building loan, outstanding amount of building loan refinanced																					$ 2,400,000
Stated interest rate, per annum					7.75%																5.82%
Debt instrument, basis spread on variable rate													0.50%	1.00%
Line of Credit Facility, Interest Rate During Period														2.98%
Ratio of funded debt to EBITDAX necessary to maintain covenants															2.00
Ratio of EBITDAX to interest expense necessary to maintain covenants																3.00

[1] On September 30, 2010, the Company entered into a $100.0 million senior secured revolving credit agreement with The Bank of Nova Scotia, as administrative agent and letter of credit issuer and lead arranger, and Amegy Bank National Association. The revolving credit facility initially matured on September 30, 2013 and had an initial borrowing base availability of $50.0 million, which was increased to $65.0 million effective December 24, 2010. The credit agreement is secured by substantially all of the Company’s assets. The Company’s wholly-owned subsidiaries guaranteed the obligations of the Company under the credit agreement.On May 3, 2011, the Company entered into a first amendment to the revolving credit agreement with The Bank of Nova Scotia, Amegy Bank, Key Bank National Association (“Key Bank”) and Société Générale. Pursuant to the terms of the first amendment, Key Bank and Société Générale were added as additional lenders, the maximum amount of the facility was increased to $350.0 million, the borrowing base was increased to $90.0 million, certain fees and rates payable by the Company under the credit agreement were decreased, and the maturity date was extended until May 3, 2015. On October 31, 2011, the Company entered into additional amendments to its revolving credit facility pursuant to which, among other things, the borrowing base under this facility was increased to $125.0 million. Effective May 2, 2012, the Company entered into additional amendments to its revolving credit facility pursuant to which, among other things, the borrowing base was increased to $155.0 million and Credit Suisse, Deutsche Bank Trust Company Americas and Iberiabank were added as additional lenders and Société Générale left the bank group. As of September 30, 2012, approximately $141,000,000 was outstanding under the revolving credit facility.On October 9, 2012, the Company entered into an amendment to its revolving credit facility that modified certain covenants to permit the offering of its 7.750% Senior Notes due 2012 ("the Note Offering") described in Note 14 below. The Note Offering closed on October 17, 2012 and the Company repaid all indebtedness outstanding under its revolving credit facility on that date with a portion of the proceeds from the Note Offering. Effective as of October 17, 2012, the Company amended its revolving credit facility to lower the applicable rates (i) from a range of 1.00% to 1.75% to a range of 0.75% to 1.50% for the base rate loans and (ii) from a range of 2.00% to 2.75% to a range of 1.75% to 2.50% for the Eurodollar rate loans and letters of credit. This amendment also lowered the commitment fees for Level 1 and Level 2 usage levels, in each case, from 0.50% per annum to 0.375% per annum. Also, effective as of October 17, 2012, in connection with the completion of the Note Offering and the Contribution, the Company's borrowing base under the credit facility was reduced to $45.0 million until the next borrowing base redetermination. Advances under the revolving credit facility, as amended, may be in the form of either base rate loans or eurodollar loans. The interest rate for base rate loans is equal to (1) the applicable rate, which ranges from 0.75% to 1.50%, plus (2) the highest of: (a) the federal funds rate plus 0.5%, (b) the rate of interest in effect for such day as publicly announced from time to time by agent as its “prime rate,” and (c) the eurodollar rate for an interest period of one month plus 1.00%. The interest rate for eurodollar loans is equal to (1) the applicable rate, which ranges from 1.75% to 2.50%, plus (2) the London interbank offered rate that appears on Reuters Screen LIBOR01 Page for deposits in U.S. dollars, or, if such rate is not available, the offered rate on such other page or service that displays the average British Bankers Association Interest Settlement Rate for deposits in U.S. dollars, or, if such rate is not available, the average quotations for three major New York money center banks of whom the agent shall inquire as the “London Interbank Offered Rate” for deposits in U.S. dollars. At September 30, 2012, amounts borrowed under the revolving credit facility bore interest at the eurodollar rate (2.98%).The revolving credit facility contains customary negative covenants including, but not limited to, restrictions on the Company’s and its subsidiaries’ ability to: incur indebtedness; grant liens; pay dividends and make other restricted payments; make investments; make fundamental changes; enter into swap contracts and forward sales contracts; dispose of assets; change the nature of their business; and enter into transactions with their affiliates. The negative covenants are subject to certain exceptions as specified in the credit agreement. The revolving credit facility also contains certain affirmative covenants, including, but not limited to the following financial covenants: (1) the ratio of funded debt to EBITDAX (net income, excluding any non-cash revenue or expense associated with swap contracts resulting from ASC 815, plus without duplication and to the extent deducted from revenues in determining net income, the sum of (a) the aggregate amount of consolidated interest expense for such period, (b) the aggregate amount of income, franchise, capital or similar tax expense (other than ad valorem taxes) for such period, (c) all amounts attributable to depletion, depreciation, amortization and asset or goodwill impairment or writedown for such period, (d) all other non-cash charges, (e) non-cash losses from minority investments, (f) actual cash distributions received from minority investments, (g) to the extent actually reimbursed by insurance, expenses with respect to liability on casualty events or business interruption, and (h) all reasonable transaction expenses related to dispositions and acquisitions of assets, investments and debt and equity offerings, and less non-cash income attributable to equity income from minority investments) for a twelve-month period may not be greater than 2.00 to 1.00; and (2) the ratio of EBITDAX to interest expense for a twelve-month period may not be less than 3.00 to 1.00. The Company was in compliance with these financial covenants at September 30, 2012.

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Subsequent Events (Details) (USD $) In Millions, unless otherwise specified	Oct. 09, 2012	Oct. 17, 2012 Issuance of Debt [Member]
Subsequent Event [Line Items]
Debt Instrument, Face Amount		$ 250
Stated interest rate, per annum	7.75%	7.75%
Debt Instrument, Redemption Price, Percentage		1
Debt Instrument, Redemption Allowable, Percentage Of Aggregate Amount, Maximum		0.35
Debt Instrument, Covenant, Aggregate Principal Amount Remaining Oustanding, Minimum, Percentage		0.65
Debt Instrument, Repurchase Price, Percentage		1.01

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Hedging Activities (Narrative) (Details) (USD $)	3 Months Ended	9 Months Ended		12 Months Ended
	Sep. 30, 2012	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2012
General Discussion of Derivative Instruments and Hedging Activities [Abstract]
Expected to reclassify out of accumulated other comprehensive income for the remainder of the year				$ 1,647,000
Loss on Fair Value Hedge Ineffectiveness	$ (179,000)	$ (100,000)	$ 0

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Earnings Per Share (Schedule Of Earnings Per Share Reconciliation) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Earnings Per Share [Abstract]
Basic, Net income	$ 502,000	$ 29,009,000	$ 52,488,000	$ 77,448,000
Diluted, Net income	$ 502,000	$ 29,009,000	$ 52,488,000	$ 77,448,000
Basic, Shares	55,692,664	50,407,240	55,658,507	47,549,672
Effect of dilutive securities, Stock options and restricted stock awards, Shares	599,128	498,722	516,074	458,696
Diluted, Shares	56,291,792	50,905,962	56,174,581	48,008,368
Basic, Net income Per Share	$ 0.01	$ 0.58	$ 0.94	$ 1.63
Diluted, Net income Per Share	$ 0.01	$ 0.57	$ 0.93	$ 1.61

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Property And Equipment (Schedule Of Property And Equipment) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Property, Plant and Equipment [Abstract]
Oil and natural gas properties	$ 1,342,715	$ 1,035,754
Office furniture and fixtures	4,437	3,692
Building	3,926	4,049
Land	260	283
Total property and equipment	1,351,338	1,043,778
Accumulated depletion, depreciation, amortization and impairment	(645,560)	(575,142)
Property and equipment, net	$ 705,778	$ 468,636

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Long-Term Debt (Tables)

9 Months Ended

Sep. 30, 2012

Long-term Debt, Unclassified [Abstract]

Breakdown Of Long-Term Debt

A breakdown of long-term debt as of September 30, 2012 and December 31, 2011 is as follows:

	September 30, 2012			December 31, 2011
Revolving credit agreement (1)	$	141,000,000		$	—
Building loans (2)	2,180,000			2,283,000
Less: current maturities of long term debt	(147,000		)	(141,000		)
Debt reflected as long term	$	143,033,000		$	2,142,000

Maturities Of Long-Term Debt

Maturities of long-term debt as of September 30, 2012 are as follows:

2013	$	147,000
2014	156,000
2015	141,166,000
2016	1,711,000
2017	—
Thereafter	—
Total	$	143,180,000

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Hedging Activities (Schedule Of Derivative Instruments In Statement Of Financial Position) (Details) (USD $)	Sep. 30, 2012	Dec. 31, 2011
General Discussion of Derivative Instruments and Hedging Activities [Abstract]
Short-term derivative instruments - asset	$ 808,000	$ 1,601,000
Short-term derivative instruments - liability	8,816,000
Long-term derivative instruments - liability	$ 1,523,000

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Stock-Based Compensation (Narrative) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012 Y	Sep. 30, 2011
Share-based Compensation [Abstract]
Stock-based compensation expense	$ 1,157	$ 384	$ 3,427	$ 837
Capitalized stock-based compensation	463	154	1,371	335
Unrecognized compensation expense	$ 7,801		$ 7,801
Weighted average period, years			1.69

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Equity Investments (Investments Accounted For By The Equity Method) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Schedule of Equity Method Investments [Line Items]
Equity investments	$ 206,690	$ 86,824
Tatex Thailand II, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity investments	319	1,030
Tatex Thailand III, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity investments	8,683	8,282
Grizzly Oil Sands ULC [Member]
Schedule of Equity Method Investments [Line Items]
Equity investments	164,974	69,008
Bison Drilling And Field Services LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity investments	14,109	6,366
Muskie Holdings LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity investments	5,840	2,138
Timber Wolf Terminals LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity investments	952
Windsor Midstream LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity investments	7,928
Stingray Pressure Pumping LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity investments	3,599
Stingray Cementing LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity investments	286
Blackhawk Midstream LLC [Member]
Schedule of Equity Method Investments [Line Items]
Equity investments

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Fair Value Measurements (Details) (USD $) In Thousands, unless otherwise specified	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	$ 808		$ 1,601
Asset retirement obligations incurred	1,711	939
Level 1 [Member] | Fixed Price Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets
Liabilities
Level 2 [Member] | Fixed Price Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets	808
Liabilities	10,339
Level 3 [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Asset retirement obligations incurred	1,711
Level 3 [Member] | Fixed Price Swaps [Member]
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Assets
Liabilities

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Commitments And Contingencies (Details) (USD $)	0 Months Ended			0 Months Ended	36 Months Ended			0 Months Ended
	Mar. 11, 1997 wells Y	Sep. 30, 2012 wells	Dec. 31, 2011	Apr. 20, 2009 Louisiana Department of Revenue Tax Litigation [Member]	Dec. 31, 2007 Louisiana Department of Revenue Tax Litigation [Member]	Dec. 31, 2010 Louisiana Department of Revenue Tax Litigation [Member] lawsuit	Nov. 30, 2006 Cudd Pressure Control Litigation [Member] defendant	Jul. 05, 2012 Cudd Pressure Control Litigation [Member] Royalty Fee [Member]	Jul. 05, 2012 Cudd Pressure Control Litigation [Member] Minimum [Member] Attorney Fees [Member]	Jul. 30, 2012 Reed Litigation [Member] defendant	Dec. 07, 2010 Reed Litigation [Member] defendant plaintiff acre	Jul. 30, 2012 Reed Litigation [Member] Individual [Member] plaintiff	Jul. 30, 2012 Reed Litigation [Member] Limited Liability Company [Member] plaintiff
Commitments [Line Items]
Percentage of interest in WCBB	50.00%
Contribution to plugging and abandonment trust per month	$ 18,000
Annual minimum wells to be plugged	20
Tenure of minimum wells to be plugged, years	20
Number of wells plugged		354
Plugging and abandonment escrow account on the WCBB properties (Note 10)		3,113,000	3,121,000
Alleged severance tax underpayment					1,800,000
Lawsuits filed value				$ 2,275,729				$ 11,800,000	$ 450,000
Loss Contingency, Pending Claims, Number						2
Loss Contingency, Damages Sought, Percentage of Final Judgement									10.00%
Loss Contingencies, Number of Plaintiffs											4	6	1
Loss Contingency, Increase (Decrease) Number of Defendants											6
Loss Contingency, Number of Defendants							6			15	21
Original number of acreage in litigation											240
Amended number of acreage in litigation											1,700

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Accounts Receivable - Related Party

9 Months Ended

Sep. 30, 2012

Receivables [Abstract]

Accounts Receivable - Related Party

ACCOUNTS RECEIVABLE – RELATED PARTY

Included in the accompanying September 30, 2012 and December 31, 2011 consolidated balance sheets are amounts receivable from related parties of the Company. These receivables consist primarily of amounts billed by the Company to related parties as operator of such parties' Colorado and Ohio oil and gas properties. At September 30, 2012 and December 31, 2011, these receivables totaled $10,915,000 and $4,731,000, respectively.

The Company is a party to administrative service agreements with Stampede Farms LLC (“Stampede”), Everest Operations Management LLC (“Everest”) and Tatex Thailand III, LLC (“Tatex III”), which agreements were each entered into effective March 1, 2008. Under these agreements, the Company’s services include professional and technical support and the fees for such services can be amended by mutual agreement of the parties. Each of these administrative service agreements may be cancelled (1) by the Company with at least 60 days prior written notice, (2) by the counterparty at any time with at least 30 days prior written notice to the Company and (3) by either party if the other party is in material breach and such breach has not been cured within 30 days of receipt of written notice of such breach. The Company did not provide services under any of these agreements in 2011 or 2012 and received no reimbursements thereunder. Each of Stampede, Everest and Tatex III is controlled by Wexford. Charles E. Davidson is the Chairman and Chief Investment Officer of Wexford and he beneficially owned approximately 13.3% and less than 1% of the Company’s outstanding common stock as of December 31, 2011 and September 28, 2012, respectively.

Effective July 1, 2008, the Company entered into an acquisition team agreement with Everest to identify and evaluate potential oil and gas properties in which the Company and Everest or its affiliates may wish to invest. Upon a successful closing of an acquisition or divestiture, the party identifying the acquisition or divestiture is entitled to receive a fee from the other party and its affiliates, if applicable, participating in such closing. The fee is equal to 1% of the party’s proportionate share of the acquisition or divestiture consideration. The agreement may be terminated by either party upon 30 days notice. Affiliates of Everest were billed approximately $360,000 and $893,000 under this acquisition team agreement during the three months and nine months ended September 30, 2012, respectively, and $466,000 and $867,000 during the three months and nine months ended September 30, 2011, respectively, which amounts are reflected as a reduction of general and administrative expenses in the consolidated statements of operations.

Effective April 1, 2010, the Company entered into an area of mutual interest agreement with Windsor Niobrara LLC (“Windsor Niobrara”), an entity controlled by Wexford, to jointly acquire oil and gas leases on certain lands located in Northwest Colorado for the purpose of exploring, exploiting and producing oil and gas from the Niobrara Formation. The agreement provides that each party must offer the other party the right to participate in such acquisitions on a 50%/50% basis. The parties also agreed, subject to certain exceptions, to share third-party costs and expenses in proportion to their respective participating interests and pay certain other fees as provided in the agreement. In connection with this agreement, Gulfport and Windsor Niobrara also entered into a development agreement, effective as of April 1, 2010, pursuant to which the Company and Windsor Niobrara agreed to jointly develop the contract area, and Gulfport agreed to act as the operator under the terms of a joint operating agreement.

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Stock-Based Compensation (Summary Of Stock Option Activity) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended
	Sep. 30, 2012 Y
Share-based Compensation [Abstract]
Options outstanding at December 31, 2011, Shares	356,241
Options outstanding at December 31, 2011, Weighted Average Exercise Price per Share	$ 6.51
Exercised, Shares
Options outstanding at September 30, 2012, Shares	356,241
Options outstanding at September 30, 2012, Weighted Average Exercise Price per Share	$ 6.51
Options exercisable at September 30, 2012, Shares	356,241
Options exercisable at September 30, 2012, Weighted Average Exercise Price per Share	$ 6.51
Options outstanding at December 31, 2011, Weighted Average Remaining Contractual Term, Years	3.41
Options outstanding at December 31, 2011, Aggregate Intrinsic Value	$ 8,172
Options outstanding at September 30, 2012, Weighted Average Remaining Contractual Term, Years	2.66
Options outstanding at September 30, 2012, Aggregate Intrinsic Value	8,816
Options exercisable at September 30, 2012, Weighted Average Remaining Contractual Term, Years	2.66
Options exercisable at September 30, 2012, Aggregate Intrinsic Value	$ 8,816

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Fair Value Measurements (Tables)

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

The following table summarizes the Company’s financial assets and liabilities by FASB ASC 820 valuation level as of September 30, 2012:

	As of September 30, 2012
	Level 1		Level 2		Level 3
Assets:
Fixed price swaps	$	—	$	808,000	$	—
Liabilities:
Fixed price swaps	$	—	$	10,339,000	$	—

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Hedging Activities (Tables)

9 Months Ended

Sep. 30, 2012

General Discussion of Derivative Instruments and Hedging Activities [Abstract]

Schedule Of Derivative Instruments

At September 30, 2012, the Company had the following fixed price swaps in place:

	Daily Volume (Bbls/day)	Weighted Average Price
October - December 2012	4,000	$	107.29
January - June 2013	4,000	$	103.33
July - December 2013	3,000	$	100.04

Schedule Of Derivative Instruments In Statement Of Financial Position

At September 30, 2012 the fair value of derivative assets related to the fixed price swaps was as follows:

Short-term derivative instruments – asset	$	808,000
Short-term derivative instruments - liability	$	8,816,000
Long-term derivative instruments - liability	$	1,523,000

Schedule Of Cash Flow Hedges

Amounts reclassified out of accumulated other comprehensive income into earnings as a component of oil and condensate sales for the nine months ended September 30, 2012 and 2011 are presented below.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012			2011
Reduction to oil and condensate sales	(185,000	)	(1,331,000	)	$	(646,000	)	$	(3,342,000	)

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Stock-Based Compensation (Summary Of Stock Option Plans By Exercise Price) (Details) (USD $)	Sep. 30, 2012
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Number Outstanding	356,241
Number Exercisable	356,241
Exercise Price $3.36 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price	3.36
Number Outstanding	206,241
Weighted Average Remaining Life (in years)	2.31
Number Exercisable	206,241
Exercise Price $9.07 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price	9.07
Number Outstanding	25,000
Weighted Average Remaining Life (in years)	2.94
Number Exercisable	25,000
Exercise Price $11.20 [Member]
Share-based Compensation, Shares Authorized under Stock Option Plans, Exercise Price Range [Line Items]
Exercise Price	11.20
Number Outstanding	125,000
Weighted Average Remaining Life (in years)	3.17
Number Exercisable	125,000

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Acquisitions (Details) (USD $) In Millions, unless otherwise specified	5 Months Ended	9 Months Ended
	Jul. 31, 2011	Sep. 30, 2012 acre
Wexford Capital Lp [Member]
Business Acquisition [Line Items]
Affiliates Participation Percentage in Acquisition of Leases		50.00%
Utica Shale [Member]
Business Acquisition [Line Items]
Gas and oil acreage, undeveloped, gross		128,000
Gas and oil acreage, undeveloped, net		64,000
Cash price of ownership interest		$ 205.8
Equity offered for the payment of acquisition, shares	6.2

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Accounts Receivable-Related Party (Details) (USD $) In Thousands, unless otherwise specified						3 Months Ended		9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 28, 2012 Charles E. Davidson [Member]	Dec. 31, 2011 Charles E. Davidson [Member]	Mar. 01, 2008 Charles E. Davidson [Member]	Sep. 30, 2012 Everest Operations Management LLC [Member]	Sep. 30, 2011 Everest Operations Management LLC [Member]	Sep. 30, 2012 Everest Operations Management LLC [Member]	Sep. 30, 2011 Everest Operations Management LLC [Member]	Sep. 30, 2012 Windsor Niobrara LLC [Member]
Related Party Transaction [Line Items]
Affiliates Participation Percentage in Acquisition of Leases										50.00%
Accounts receivable-related parties	$ 10,915	$ 4,731
Reimbursement for general and administrative expenses performed for related party under acquisition team agreement						$ 360	$ 466	$ 893	$ 867
Common Stock Ownership Percentage Per Individual			0.01	0.133
Percentage of Proportionate Share of the Acquisition or Divestiture Consideration Payable to Affiliates						1.00%		1.00%
Cancellation of Agreement Required Written Notice Term					60 days
Cancellation of Agreement Required Wrriten Notice Term, Counterparty					30 days
Breech of Contract, Cure Period					30 days

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Acquisitions

9 Months Ended

Sep. 30, 2012

Business Acquisition, Entity Acquired and Reason for Acquisition [Abstract]

Acquisitions

ACQUISITIONS

Beginning in February 2011, the Company entered into agreements to acquire certain leasehold interests located in the Utica Shale in Ohio. Certain of the agreements also granted the Company an exclusive right of first refusal for a period of six months on certain additional tracts leased by the seller. Gulfport is the operator on this acreage in the Utica Shale. As of September 30, 2012, the Company had acquired leasehold interests in approximately 128,000 gross (64,000 net) acres in the Utica Shale for approximately $205.8 million. Gulfport funded these transactions with a portion of the proceeds from public offerings of an aggregate of 6.2 million shares of the Company’s common stock completed in March and July of 2011. Entities controlled by Wexford Capital LP (“Wexford”) have participated with the Company on a 50/50 basis in the acquisition of all leases described above.

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Property And Equipment (Narrative) (Details) (USD $)	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Oct. 24, 2012 Contribution Agreement With Diamondback Energy Inc [Member]	Oct. 17, 2012 Contribution Agreement With Diamondback Energy Inc [Member]	Oct. 11, 2012 Contribution Agreement With Diamondback Energy Inc [Member]	May 07, 2012 Contribution Agreement With Diamondback Energy Inc [Member]
Property, Plant and Equipment [Line Items]
Cumulative capitalization of general and administrative costs incurred and capitalized to the full cost pool			$ 29,664,000
Capitalized general and administrative costs	2,034,000	1,338,000	6,170,000	4,126,000
Shares issued in exchange for contribution of oil and gas interests								7,914,036
Non-interest bearing promissory note received in exchange for contribution of oil and gas interests								63,590,050.00
Amount that would have been owed had Contribution not closed								16,000,000
Minimum threshold of ownership interest for designating a nominee to serve on the board of directors									10.00%
Long-term debt, net of current maturities	$ 143,033,000		$ 143,033,000		$ 2,142,000
Outstanding common stock prior to closing, interest percent, received in exchange for contribution of oil and gas interests									35.00%
Ownership interest						21.40%	22.50%

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Long-Term Debt (Breakdown Of Long-Term Debt) (Details) (USD $)	Sep. 30, 2012		Dec. 31, 2011
Long-term Debt, Unclassified [Abstract]
Revolving credit agreement	$ 141,000,000	[1]		[1]
Building loans	2,180,000	[2]	2,283,000	[2]
Less: current maturities of long term debt	(147,000)		(141,000)
Debt reflected as long term	$ 143,033,000		$ 2,142,000

[1] On September 30, 2010, the Company entered into a $100.0 million senior secured revolving credit agreement with The Bank of Nova Scotia, as administrative agent and letter of credit issuer and lead arranger, and Amegy Bank National Association. The revolving credit facility initially matured on September 30, 2013 and had an initial borrowing base availability of $50.0 million, which was increased to $65.0 million effective December 24, 2010. The credit agreement is secured by substantially all of the Company’s assets. The Company’s wholly-owned subsidiaries guaranteed the obligations of the Company under the credit agreement.On May 3, 2011, the Company entered into a first amendment to the revolving credit agreement with The Bank of Nova Scotia, Amegy Bank, Key Bank National Association (“Key Bank”) and Société Générale. Pursuant to the terms of the first amendment, Key Bank and Société Générale were added as additional lenders, the maximum amount of the facility was increased to $350.0 million, the borrowing base was increased to $90.0 million, certain fees and rates payable by the Company under the credit agreement were decreased, and the maturity date was extended until May 3, 2015. On October 31, 2011, the Company entered into additional amendments to its revolving credit facility pursuant to which, among other things, the borrowing base under this facility was increased to $125.0 million. Effective May 2, 2012, the Company entered into additional amendments to its revolving credit facility pursuant to which, among other things, the borrowing base was increased to $155.0 million and Credit Suisse, Deutsche Bank Trust Company Americas and Iberiabank were added as additional lenders and Société Générale left the bank group. As of September 30, 2012, approximately $141,000,000 was outstanding under the revolving credit facility.On October 9, 2012, the Company entered into an amendment to its revolving credit facility that modified certain covenants to permit the offering of its 7.750% Senior Notes due 2012 ("the Note Offering") described in Note 14 below. The Note Offering closed on October 17, 2012 and the Company repaid all indebtedness outstanding under its revolving credit facility on that date with a portion of the proceeds from the Note Offering. Effective as of October 17, 2012, the Company amended its revolving credit facility to lower the applicable rates (i) from a range of 1.00% to 1.75% to a range of 0.75% to 1.50% for the base rate loans and (ii) from a range of 2.00% to 2.75% to a range of 1.75% to 2.50% for the Eurodollar rate loans and letters of credit. This amendment also lowered the commitment fees for Level 1 and Level 2 usage levels, in each case, from 0.50% per annum to 0.375% per annum. Also, effective as of October 17, 2012, in connection with the completion of the Note Offering and the Contribution, the Company's borrowing base under the credit facility was reduced to $45.0 million until the next borrowing base redetermination. Advances under the revolving credit facility, as amended, may be in the form of either base rate loans or eurodollar loans. The interest rate for base rate loans is equal to (1) the applicable rate, which ranges from 0.75% to 1.50%, plus (2) the highest of: (a) the federal funds rate plus 0.5%, (b) the rate of interest in effect for such day as publicly announced from time to time by agent as its “prime rate,” and (c) the eurodollar rate for an interest period of one month plus 1.00%. The interest rate for eurodollar loans is equal to (1) the applicable rate, which ranges from 1.75% to 2.50%, plus (2) the London interbank offered rate that appears on Reuters Screen LIBOR01 Page for deposits in U.S. dollars, or, if such rate is not available, the offered rate on such other page or service that displays the average British Bankers Association Interest Settlement Rate for deposits in U.S. dollars, or, if such rate is not available, the average quotations for three major New York money center banks of whom the agent shall inquire as the “London Interbank Offered Rate” for deposits in U.S. dollars. At September 30, 2012, amounts borrowed under the revolving credit facility bore interest at the eurodollar rate (2.98%).The revolving credit facility contains customary negative covenants including, but not limited to, restrictions on the Company’s and its subsidiaries’ ability to: incur indebtedness; grant liens; pay dividends and make other restricted payments; make investments; make fundamental changes; enter into swap contracts and forward sales contracts; dispose of assets; change the nature of their business; and enter into transactions with their affiliates. The negative covenants are subject to certain exceptions as specified in the credit agreement. The revolving credit facility also contains certain affirmative covenants, including, but not limited to the following financial covenants: (1) the ratio of funded debt to EBITDAX (net income, excluding any non-cash revenue or expense associated with swap contracts resulting from ASC 815, plus without duplication and to the extent deducted from revenues in determining net income, the sum of (a) the aggregate amount of consolidated interest expense for such period, (b) the aggregate amount of income, franchise, capital or similar tax expense (other than ad valorem taxes) for such period, (c) all amounts attributable to depletion, depreciation, amortization and asset or goodwill impairment or writedown for such period, (d) all other non-cash charges, (e) non-cash losses from minority investments, (f) actual cash distributions received from minority investments, (g) to the extent actually reimbursed by insurance, expenses with respect to liability on casualty events or business interruption, and (h) all reasonable transaction expenses related to dispositions and acquisitions of assets, investments and debt and equity offerings, and less non-cash income attributable to equity income from minority investments) for a twelve-month period may not be greater than 2.00 to 1.00; and (2) the ratio of EBITDAX to interest expense for a twelve-month period may not be less than 3.00 to 1.00. The Company was in compliance with these financial covenants at September 30, 2012.

[2] In March 2011, the Company entered into a new building loan agreement for the office building it occupies in Oklahoma City, Oklahoma. The new loan agreement refinanced the $2.4 million outstanding under the previous building loan agreement. The new agreement extended the maturity date of the building loan to February 2016 and reduced the interest rate to 5.82% per annum. The new building loan requires monthly interest and principal payments of approximately $22,000 and is collateralized by the Oklahoma City office building and associated land.

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Income Taxes (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Income Tax Disclosure [Abstract]
Deferred tax assets recognized which had previously been subject to a valuation allowance	$ 8,992
Deferred tax expense	15,514		15,514	1
Valuation allowance	$ 3,355		$ 3,355

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Consolidated Balance Sheets (USD $)	Sep. 30, 2012	Dec. 31, 2011
Assets
Cash and cash equivalents	$ 12,280,000	$ 93,897,000
Accounts receivable-oil and gas	24,820,000	28,019,000
Accounts receivable-related parties	10,915,000	4,731,000
Prepaid expenses and other current assets	2,788,000	1,327,000
Short-term derivative instruments	808,000	1,601,000
Total current assets	51,611,000	129,575,000
Property and equipment:
Oil and natural gas properties, full-cost accounting, $234,630,000 and $138,623,000 excluded from amortization in 2012 and 2011, respectively	1,342,715,000	1,035,754,000
Other property and equipment	8,623,000	8,024,000
Accumulated depletion, depreciation, amortization and impairment	(645,560,000)	(575,142,000)
Property and equipment, net	705,778,000	468,636,000
Other assets
Equity investments	206,690,000	86,824,000
Other assets	5,530,000	5,123,000
Total other assets	212,220,000	91,947,000
Deferred tax asset	1,000,000	1,000,000
Total assets	970,609,000	691,158,000
Liabilities and Stockholders' Equity
Accounts payable and accrued liabilities	107,058,000	43,872,000
Asset retirement obligation-current	60,000	620,000
Short-term derivative instruments	8,816,000
Current maturities of long-term debt	147,000	141,000
Total current liabilities	116,081,000	44,633,000
Long-term derivative instruments	1,523,000
Asset retirement obligation - long-term	13,831,000	12,033,000
Deferred tax liability	15,514,000	0
Long-term debt, net of current maturities	143,033,000	2,142,000
Total liabilities	289,982,000	58,808,000
Commitments and contingencies (Note 10)
Preferred stock, $.01 par value; 5,000,000 authorized, 30,000 authorized as redeemable 12% cumulative preferred stock, Series A; 0 issued and outstanding
Stockholders' equity:
Common stock - $.01 par value, 100,000,000 authorized, 55,717,702 issued and outstanding in 2012 and 55,621,371 in 2011	557,000	556,000
Paid-in capital	608,010,000	604,584,000
Accumulated other comprehensive income (loss)	(4,975,000)	2,663,000
Retained earnings	77,035,000	24,547,000
Total stockholders' equity	680,627,000	632,350,000
Total liabilities and stockholders' equity	$ 970,609,000	$ 691,158,000

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Stock-Based Compensation (Summary Of Restricted Stock Award And Unit Activity) (Details) (USD $)	9 Months Ended
	Sep. 30, 2012
Share-based Compensation [Abstract]
Number of Unvested Restricted Shares as of December 31, 2011	203,348
Unvested Restricted Shares, Weighted Average Grant Date Fair Value as of December 31, 2011	$ 26.02
Granted, Number of Unvested Restricted Shares	183,500
Granted, Weighted Average Grant Date Fair Value	$ 36.09
Vested, Number of Unvested Restricted Shares	(96,331)
Vested, Weighted Average Grant Date Fair Value	$ 30.17
Forfeited, Number of Unvested Restricted Shares	(9,334)
Forfeited, Weigthed Average Grant Date Fair Value	$ 23
Number of Unvested Restricted Shares as of June 30, 2012	281,183
Unvested Restricted Shares, Weighted Average Grant Date Fair Value as of June 30, 2012	$ 31.28

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Consolidated Statements Of Stockholders' Equity (USD $) In Thousands, except Share data	Total	Common Stock [Member]	Additional Paid-In Capital [Member]	Accumulated Other Comprehensive Income (Loss) [Member]	Retained Earnings (Accumulated Deficit) [Member]
Balance, Value at Dec. 31, 2010	$ 211,056	$ 446	$ 296,253	$ (1,768)	$ (83,875)
Balance, Shares at Dec. 31, 2010		44,645,435
Net income	77,448				77,448
Other Comprehensive Income (Loss)	9,668			9,668
Stock Compensation	837		837
Issuance of Common Stock in public offering, net of related expenses, Shares		6,210,000
Issuance of Common Stock in public offering, net of related expenses, Value	178,279	62	178,217
Issuance of Common Stock through exercise of options, Shares		41,000
Issuance of Common Stock through exercise of options, Value	397	1	396
Issuance of Restricted Stock, Shares		47,819
Issuance of Restricted Stock, Value		0	0
Balance, Value at Sep. 30, 2011	477,685	509	475,703	7,900	(6,427)
Balance, Shares at Sep. 30, 2011		50,944,254
Balance, Value at Dec. 31, 2011	632,350	556	604,584	2,663	24,547
Balance, Shares at Dec. 31, 2011	55,621,371	55,621,371
Net income	52,488				52,488
Other Comprehensive Income (Loss)	(7,638)			(7,638)
Stock Compensation	3,427		3,427
Issuance of Common Stock through exercise of options, Shares
Issuance of Restricted Stock, Shares		96,331
Issuance of Restricted Stock, Value		1	(1)
Balance, Value at Sep. 30, 2012	$ 680,627	$ 557	$ 608,010	$ (4,975)	$ 77,035
Balance, Shares at Sep. 30, 2012	55,717,702	55,717,702

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Property And Equipment (Schedule Of Asset Retirement Obligation) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
Asset retirement obligation, beginning of period			$ 12,653	$ 10,845
Liabilities incurred			1,711	939
Liabilities settled			(1,002)
Accretion expense	176	168	529	491
Asset retirement obligation as of end of period	13,891	12,275	13,891	12,275
Asset retirement obligation, total	13,891	12,275	13,891	12,275
Less current portion	60	635	60	635	620
Asset retirement obligation, long-term	$ 13,831	$ 11,640	$ 13,831	$ 11,640	$ 12,033

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Property And Equipment (Tables)

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment [Abstract]

Schedule Of Property And Equipment

The major categories of property and equipment and related accumulated depletion, depreciation, amortization and impairment as of September 30, 2012 and December 31, 2011 are as follows:

	September 30, 2012			December 31, 2011
Oil and natural gas properties	$	1,342,715,000		$	1,035,754,000
Office furniture and fixtures	4,437,000			3,692,000
Building	3,926,000			4,049,000
Land	260,000			283,000
Total property and equipment	1,351,338,000			1,043,778,000
Accumulated depletion, depreciation, amortization and impairment	(645,560,000		)	(575,142,000		)
Property and equipment, net	$	705,778,000		$	468,636,000

Summary Of Oil And Gas Properties Not Subject To Amortization

The following table summarizes the Company’s non-producing properties excluded from amortization by area at September 30, 2012:

	September 30, 2012
West Texas Permian	$	14,661,000
Colorado	5,871,000
Bakken	300,000
Southern Louisiana	761,000
Ohio	207,281,000
Belize	5,711,000
Other	45,000
	$	234,630,000

Schedule Of Asset Retirement Obligation

A reconciliation of the asset retirement obligation for the nine months ended September 30, 2012 and 2011 is as follows:

	September 30, 2012			September 30, 2011
Asset retirement obligation, beginning of period	$	12,653,000		$	10,845,000
Liabilities incurred	1,711,000			939,000
Liabilities settled	(1,002,000		)	—
Accretion expense	529,000			491,000
Asset retirement obligation as of end of period	13,891,000			12,275,000
Less current portion	60,000			635,000
Asset retirement obligation, long-term	$	13,831,000		$	11,640,000

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Equity Investments (Narrative) (Details) (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended			9 Months Ended		9 Months Ended			3 Months Ended		9 Months Ended				1 Months Ended	3 Months Ended	9 Months Ended				3 Months Ended	9 Months Ended		3 Months Ended	9 Months Ended			3 Months Ended	9 Months Ended			3 Months Ended	9 Months Ended		9 Months Ended		3 Months Ended	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011	Dec. 31, 2011	Sep. 30, 2012 Tatex Thailand II, LLC [Member]	Dec. 31, 2011 Tatex Thailand II, LLC [Member]	Sep. 30, 2012 Tatex Thailand III, LLC [Member]	Sep. 30, 2011 Tatex Thailand III, LLC [Member]	Dec. 31, 2011 Tatex Thailand III, LLC [Member]	Sep. 30, 2012 Grizzly Oil Sands ULC [Member] lease_block	Sep. 30, 2011 Grizzly Oil Sands ULC [Member]	Sep. 30, 2012 Grizzly Oil Sands ULC [Member] lease_block	Sep. 30, 2011 Grizzly Oil Sands ULC [Member]	Dec. 31, 2011 Grizzly Oil Sands ULC [Member]	Dec. 07, 2011 Grizzly Oil Sands ULC [Member]	Apr. 30, 2012 Bison Drilling And Field Services LLC [Member]	Sep. 30, 2012 Bison Drilling And Field Services LLC [Member]	Sep. 30, 2012 Bison Drilling And Field Services LLC [Member]	May 15, 2012 Bison Drilling And Field Services LLC [Member]	Dec. 31, 2011 Bison Drilling And Field Services LLC [Member]	Sep. 30, 2011 Bison Drilling And Field Services LLC [Member]	Sep. 30, 2012 Muskie Holdings LLC [Member]	Sep. 30, 2012 Muskie Holdings LLC [Member]	Dec. 31, 2011 Muskie Holdings LLC [Member]	Sep. 30, 2012 Timber Wolf Terminals LLC [Member]	Sep. 30, 2012 Timber Wolf Terminals LLC [Member]	Mar. 31, 2012 Timber Wolf Terminals LLC [Member]	Dec. 31, 2011 Timber Wolf Terminals LLC [Member]	Sep. 30, 2012 Windsor Midstream LLC [Member]	Sep. 30, 2012 Windsor Midstream LLC [Member]	Mar. 31, 2012 Windsor Midstream LLC [Member]	Dec. 31, 2011 Windsor Midstream LLC [Member]	Sep. 30, 2012 Stingray Pressure Pumping LLC [Member]	Sep. 30, 2012 Stingray Pressure Pumping LLC [Member]	Dec. 31, 2011 Stingray Pressure Pumping LLC [Member]	Sep. 30, 2012 Stingray Cementing LLC [Member]	Dec. 31, 2011 Stingray Cementing LLC [Member]	Sep. 30, 2012 Blackhawk Midstream LLC [Member]	Sep. 30, 2012 Blackhawk Midstream LLC [Member]	Dec. 31, 2011 Blackhawk Midstream LLC [Member]	Sep. 30, 2012 Apico Llc [Member] Tatex Thailand II, LLC [Member]	Mar. 31, 2012 MidMar Gas LLC [Member] Windsor Midstream LLC [Member]	Sep. 30, 2012 Southeast Asia [Member] Apico Llc [Member] Tatex Thailand II, LLC [Member] acre	Sep. 30, 2012 Wexford Capital Lp [Member] Tatex Thailand III, LLC [Member]
Schedule of Equity Method Investments [Line Items]
Ownership interest						23.50%		17.90%			24.9999%		24.9999%				40.00%					25.00%			25.00%			50.00%				22.50%		50.00%	50.00%		50.00%		50.00%	50.00%
Equity Method Investment, Number of Lease Blocks Owned by Affiliate											11		11
Equity shares owned by affiliate																																										85,122
Equity Method Investment, Total Shares Outstanding of Sub Affiliate																																										1,000,000
Gas and Oil Area, Developed, Gross, Held by Sub Affiliate																																												2,000,000
Distributions received			$ 710	$ 750		$ 710
Equity investments	206,690		206,690		86,824	319	1,030	8,683		8,282	164,974		164,974		69,008			14,109	14,109		6,366		5,840	5,840	2,138	952	952			7,928	7,928			3,599	3,599		286
Remaining interests in investee, percent																																													68.70%
Cash calls paid								627					93,436						1,373					3,884							702				4,132		291			357
Loss from equity investments	1,165	(52)	1,793	906				226	199		280	182	864	995				119	(218)				110	182		25	48			(90)	(205)			446	533				113	357
Equity Method Investments, Increase (Decrease) Due To Foreign Currency Translation Adjustment											5,320		3,394
Interest income	6	64	37	139								41		117
Increase in investment of affiliate due to conversion of debt to equity																22,325
Currency transaction loss in note receivable																75
Ownership interest cost																						6,009			2,142			1,000				7,021
Equity method investment additional ownership percentage																	15.00%
Equity Method Investment, Increase (Decrease) in Aggregate Cost																	6,152
Loans Receivable, Basis Spread on Variable Rate																				0.28%
Loans Receivable, Fixed Interest Rate																				8.00%
Origination of Notes Receivable from Related Parties				$ 3,182															$ 1,594
Equity Method Invesmtent, Ownership Percentage, Owned by Affiliate																																											28.40%

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Other Assets (Tables)

9 Months Ended

Sep. 30, 2012

Other Assets, Noncurrent Disclosure [Abstract]

Schedule Of Other Assets

Other assets consist of the following as of September 30, 2012 and December 31, 2011:

	September 30, 2012		December 31, 2011
Plugging and abandonment escrow account on the WCBB properties (Note 10)	$	3,113,000	$	3,121,000
Certificates of deposit securing letter of credit	275,000		275,000
Prepaid drilling costs	536,000		228,000
Loan commitment fees, net	1,602,000		1,495,000
Deposits	4,000		4,000
	$	5,530,000	$	5,123,000

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Consolidated Statements Of Cash Flows (USD $)	9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011
Cash flows from operating activities:
Net income	$ 52,488,000	$ 77,448,000
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion of discount-Asset Retirement Obligation	529,000	491,000
Depletion, depreciation and amortization	70,424,000	40,606,000
Share-based compensation expense	2,056,000	502,000
Loss from equity investments	1,793,000	906,000
Interest income-note receivable	(2,000)	(117,000)
Unrealized gain on derivative instruments	100,000	(506,000)
Deferred income tax benefit	15,514,000	55,000
Amortization of loan commitment fees	405,000	383,000
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable	3,199,000	(7,066,000)
Increase in accounts receivable - related party	(6,184,000)	(1,906,000)
Increase in prepaid expenses	(1,461,000)	123,000
Increase in accounts payable and accrued liabilities	28,017,000	11,127,000
Settlement of asset retirement obligation	(1,002,000)
Net cash provided by operating activities	165,876,000	122,046,000
Cash flows from investing activities:
Deductions to cash held in escrow	8,000	8,000
Additions to other property, plant and equipment	(599,000)	(137,000)
Additions to oil and gas properties	(269,177,000)	(202,164,000)
Proceeds from sale of other property, plant and equipment	140,000
Proceeds from sale of oil and gas properties		1,384,000
Advances on note receivable to related party		(3,182,000)
Contributions to equity method investments	(118,975,000)	(26,864,000)
Distribution from equity method investments	710,000	750,000
Net cash used in investing activities	(387,893,000)	(230,205,000)
Cash flows from financing activities:
Principal payments on borrowings	(12,103,000)	(84,600,000)
Borrowings on line of credit	153,000,000	35,000,000
Loan commitment fees	(497,000)	(674,000)
Proceeds from issuance of common stock, net of offering costs, and exercise of stock options		178,676,000
Net cash provided by financing activities	140,400,000	128,402,000
Net (decrease) increase in cash and cash equivalents	(81,617,000)	20,243,000
Cash and cash equivalents at beginning of period	93,897,000	2,468,000
Cash and cash equivalents at end of period	12,280,000	22,711,000
Supplemental disclosure of cash flow information:
Interest payments	941,000	912,000
Income tax payments	255,000
Supplemental disclosure of non-cash transactions:
Capitalized stock based compensation	1,371,000	335,000
Asset retirement obligation capitalized	1,711,000	939,000
Foreign currency translation gain (loss) on investment in Grizzly Oil Sands ULC	3,394,000	(2,200,000)
Foreign currency translation gain (loss) on note receivable-related party		$ (1,085,000)

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Consolidated Balance Sheets (Parenthetical) (USD $) In Thousands, except Share data, unless otherwise specified	9 Months Ended	12 Months Ended
	Sep. 30, 2012	Dec. 31, 2011
Statement of Financial Position [Abstract]
Capitalized costs of oil and natural gas properties excluded from amortization	$ 234,630	$ 138,623
Preferred stock, par value	$ 0.01	$ 0.01
Preferred stock, shares authorized	5,000,000	5,000,000
Preferred stock, dividend rate, percentage	12.00%	12.00%
12% cumulative preferred stock, shares authorized	30,000	30,000
Preferred stock Series A, issued	0	0
Preferred stock Series A, outstanding	0	0
Common stock, par value	$ 0.01	$ 0.01
Common stock, shares authorized	100,000,000	100,000,000
Common stock, shares issued	55,717,702	55,621,371
Common stock, shares outstanding	55,717,702	55,621,371

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Commitments And Contingencies

9 Months Ended

Sep. 30, 2012

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies Disclosure

COMMITMENTS AND CONTINGENCIES

Plugging and Abandonment Funds

In connection with the acquisition in 1997 of the remaining 50% interest in the Company's West Cote Blanche Bay ("WCBB") properties, the Company assumed the seller’s (Chevron) obligation to contribute approximately $18,000 per month through March 2004, to a plugging and abandonment trust and the obligation to plug a minimum of 20 wells per year for 20 years commencing March 11, 1997. Chevron retained a security interest in production from these properties until abandonment obligations to Chevron have been fulfilled. Beginning in 2009, the Company could access the trust for use in plugging and abandonment charges associated with the property, although it has not yet done so. As of September 30, 2012, the plugging and abandonment trust totaled approximately $3,113,000. At September 30, 2012, the Company had plugged 354 wells at WCBB since it began its plugging program in 1997, which management believes fulfills its current minimum plugging obligation.

Litigation

The Louisiana Department of Revenue (“LDR”) is disputing Gulfport’s severance tax payments to the State of Louisiana from the sale of oil under fixed price contracts during the years 2005 through 2007. The LDR maintains that Gulfport paid approximately $1,800,000 less in severance taxes under fixed price terms than the severance taxes Gulfport would have had to pay had Gulfport paid severance taxes on the oil at the contracted market rates only. Gulfport has denied any liability to the LDR for underpayment of severance taxes and has maintained that it was entitled to enter into the fixed price contracts with unrelated third parties and pay severance taxes based upon the proceeds received under those contracts. Gulfport has maintained its right to contest any final assessment or suit for collection if brought by the State. On April 20, 2009, the LDR filed a lawsuit in the 15^th Judicial District Court, Lafayette Parish, in Louisiana against Gulfport seeking $2,275,729 in severance taxes, plus interest and court costs. Gulfport filed a response denying any liability to the LDR for underpayment of severance taxes and is defending itself in the lawsuit. The LDR had taken no further action on this lawsuit since filing its petition until recently when it propounded discovery requests to which Gulfport has responded. Since Gulfport served discovery requests on the LDR and received the LDR’s responses, there has been no further activity in this case and no trial date has been set.

In December 2010, the LDR filed two identical lawsuits against Gulfport in different venues to recover allegedly underpaid severance taxes on crude oil for the period January 1, 2007 through December 31, 2010, together with a claim for attorney’s fees. The petitions do not make any specific claim for damages or unpaid taxes. As with the first lawsuit filed by the LDR in 2009, Gulfport has denied all liability and will vigorously defend the lawsuit. The cases are in the early stages, and Gulfport has not yet filed a response to these lawsuits. Recently, the LDR filed motions to stay the lawsuits before Gulfport filed any responsive pleadings. The LDR has advised Gulfport that it intends to pursue settlement discussions with Gulfport and other similarly situated defendants in separate proceedings, but has taken no action to initiate settlement talks. There has been no activity on either of these lawsuits for more than a year.

Other Litigation

In November 2006, Cudd Pressure Control, Inc. (“Cudd”) filed a lawsuit against Gulfport, Great White Pressure Control LLC (“Great White”) and six former Cudd employees in the 129th Judicial District Harris County, Texas. The lawsuit was subsequently removed to the United States District Court for the Southern District of Texas (Houston Division). The lawsuit alleged RICO violations and several other causes of action relating to Great White’s employment of the former Cudd employees and sought unspecified monetary damages and injunctive relief. On stipulation by the parties, the plaintiff’s RICO claim was dismissed without prejudice by order of the court on February 14, 2007. Gulfport filed a motion for summary judgment on October 5, 2007. The court entered a final interlocutory judgment in favor of all defendants, including Gulfport, on April 8, 2008. On November 3, 2008, Cudd filed its appeal with the U.S. Court of Appeals for the Fifth Circuit. The Fifth Circuit vacated the district court decision finding, among other things, that the district court should not have entered summary judgment without first allowing more discovery. The case was remanded to the district court, and Cudd filed a motion to remand the case to the original state court, which motion was granted. Cudd subsequently filed amended petitions with the state court (a) alleging, among other things, that Gulfport conspired with the other defendants to misappropriate, and misappropriated Cudd’s trade secrets and caused its employees to breach their fiduciary duties, and (b) seeking monetary damages including $11.8 million as a reasonable royalty for the alleged use of its trade secrets. Cudd also sought disgorgement of the alleged benefits received by the various defendants. Cudd also sought its attorney's fees, which Cudd claimed were not less than $450,000, plus 10% of any final judgment. This case went to trial on September 5, 2012 and on September 28, 2012 the jury rendered its verdict, awarding no damages to the plaintiffs. Gulfport along with all defendants filed a Motion for Entry of Judgment that is consistent for with the jury's verdict. Cudd filed an Application for Disgorgement and a Motion for Judgment Notwithstanding the Verdict. The court denied all of Cudd's post-trial motions on October 12, 2012, and the defendants are waiting for the court to enter a judgment consistent for with the jury's verdict.

On July 30, 2010, six individuals and one limited liability company sued 15 oil and gas companies in Cameron Parish Louisiana for contamination across the surface of where the defendants operated in an action entitled Reeds et al. v. BP American Production Company et al., 38th Judicial District. No. 10-18714. The plaintiffs’ original petition for damages, which did not name Gulfport as a defendant, alleges that the plaintiffs’ property located in Cameron Parish, Louisiana within the Hackberry oil field is contaminated as a result of historic oil and gas exploration and production activities. Plaintiffs allege that the defendants conducted, directed and participated in various oil and gas exploration and production activities on their property which allegedly have contaminated or otherwise caused damage to the property, and have sued the defendants for alleged breaches of oil, gas and mineral leases, as well as for alleged negligence, trespass, failure to warn, strict liability, punitive damages, lease liability, contract liability, unjust enrichment, restoration damages, assessment and response costs and stigma damages. On December 7, 2010, Gulfport was served with a copy of the plaintiffs’ first supplemental and amending petition which added four additional plaintiffs and six additional defendants, including Gulfport, bringing the total number of defendants to 21. It also increased the total acreage at issue in this litigation from 240 acres to approximately 1,700 acres. In addition to the damages sought in the original petition, the plaintiffs now also seek: damages sufficient to cover the cost of conducting a comprehensive environmental assessment of all present and yet unidentified pollution and contamination of their property; the cost to restore the property to its pre-polluted original condition; damages for mental anguish and annoyance, discomfort and inconvenience caused by the nuisance created by defendants; land loss and subsidence damages and the cost of backfilling canals and other excavations; damages for loss of use of land and lost profits and income; attorney fees and expenses and damages for evaluation and remediation of any contamination that threatens groundwater. In addition to Gulfport, current defendants include ExxonMobil Oil Corporation, Mobil Exploration & Producing North America Inc., Chevron U.S.A. Inc., The Superior Oil Company, Union Oil Company of California, BP America Production Company, Tempest Oil Company, Inc., ConocoPhillips Company, Continental Oil Company, WM. T. Burton Industries, Inc., Freeport Sulphur Company, Eagle Petroleum Company, U.S. Oil of Louisiana, M&S Oil Company, and Empire Land Corporation, Inc. of Delaware. On January 21, 2011, Gulfport filed a pleading challenging the legal sufficiency of the petitions on several grounds and requesting that they either be dismissed or that plaintiffs be required to amend such petitions. In response to the pleadings filed by Gulfport and similar pleadings filed by other defendants, the plaintiffs filed a third amending petition with exhibits which expands the description of the property at issue, attaches numerous aerial photos and identifies the mineral leases at issue. In response, Gulfport and numerous defendants re-urged their pleadings challenging the legal sufficiency of the petitions. Some of the defendants’ grounds for challenging the plaintiffs’ petitions were heard by the court on May 25, 2011 and were denied. The court signed the written judgment on December 9, 2011. Gulfport noticed its intent to seek supervisory review on December 19, 2011 and the trial court fixed a return date of January 11, 2012 for the filing of the writ application. Gulfport filed its supervisory writ, which was recently denied by the Louisiana Third Circuit Court of Appeal and the Louisiana Supreme Court. Gulfport has been active in serving discovery requests and responding to discovery requests from the plaintiffs. It is anticipated that the discovery phase of this case will become more active in the upcoming months. Plaintiffs' counsel is seeking a trial date in mid-2013.

Due to the current stages of the LDR and Reed litigation, the outcome is uncertain and management cannot determine the amount of loss, if any, that may result. In each case management has determined the possibility of loss is remote. However, litigation is inherently uncertain. Adverse decisions in one or more of the above matters could have a material adverse effect on the Company’s financial condition or results of operations and management cannot determine the amount of loss, if any, that may result.

The Company has been named as a defendant in various other lawsuits related to its business. In each such case, management has determined that the possibility of loss is remote. The resolution of these matters is not expected to have a material adverse effect on the Company financial condition or results of operations in future periods

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Document And Entity Information	9 Months Ended
	Sep. 30, 2012	Nov. 01, 2012
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2012
Entity Registrant Name	GULFPORT ENERGY CORP
Entity Central Index Key	0000874499
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2012
Entity Filer Category	Large Accelerated Filer
Document Fiscal Period Focus	Q3
Entity Common Stock, Shares Outstanding		55,717,702

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Hedging Activities

9 Months Ended

Sep. 30, 2012

General Discussion of Derivative Instruments and Hedging Activities [Abstract]

Hedging Activities

HEDGING ACTIVITIES

The Company seeks to reduce its exposure to unfavorable changes in oil prices, which are subject to significant and often volatile fluctuation, by entering into fixed price swaps and forward sales contracts. These contracts allow the Company to predict with greater certainty the effective oil prices to be received for hedged production and benefit operating cash flows and earnings when market prices are less than the fixed prices provided in the contracts. However, the Company will not benefit from market prices that are higher than the fixed prices in the contracts for hedged production.

The Company accounts for its oil derivative instruments as cash flow hedges for accounting purposes under FASB ASC 815 and related pronouncements. All derivative contracts are marked to market each quarter end and are included in the accompanying consolidated balance sheets as derivative assets and liabilities.

During the third quarter of 2011 and the first and third quarters of 2012, the Company entered into fixed price swap contracts for 2012 and 2013 with the purchaser of the Company’s WCBB oil and four financial institutions. The Company’s fixed price swap contracts are tied to the commodity prices on the International Petroleum Exchange (“IPE”). The Company will receive the fixed price amount stated in the contract and pay to its counterparty the current market price for oil as listed on the IPE for Brent Crude. At September 30, 2012, the Company had the following fixed price swaps in place:

	Daily Volume (Bbls/day)	Weighted Average Price
October - December 2012	4,000	$	107.29
January - June 2013	4,000	$	103.33
July - December 2013	3,000	$	100.04

At September 30, 2012 the fair value of derivative assets related to the fixed price swaps was as follows:

Short-term derivative instruments – asset	$	808,000
Short-term derivative instruments - liability	$	8,816,000
Long-term derivative instruments - liability	$	1,523,000

All fixed price swaps and forward sales contracts have been executed in connection with the Company’s oil price hedging program. For fixed price swaps qualifying as cash flow hedges pursuant to FASB ASC 815, the realized contract price is included in oil sales in the period for which the underlying production was hedged.

For derivatives designated as cash flow hedges and meeting the effectiveness guidelines of FASB ASC 815, changes in fair value are recognized in accumulated other comprehensive income until the hedged item is recognized in earnings. Amounts reclassified out of accumulated other comprehensive income into earnings as a component of oil and condensate sales for the nine months ended September 30, 2012 and 2011 are presented below.

	Three Months Ended September 30,				Nine Months Ended September 30,
	2012		2011		2012			2011
Reduction to oil and condensate sales	(185,000	)	(1,331,000	)	$	(646,000	)	$	(3,342,000	)

The Company expects to reclassify $1,647,000 out of accumulated other comprehensive income into earnings as a component of oil and condensate sales during the remainder of the year ended December 31, 2012 related to fixed price swaps.

Hedge effectiveness is measured at least quarterly based on the relative changes in fair value between the derivative contract and the hedged item over time. Any change in fair value resulting from ineffectiveness is recognized immediately in earnings. The Company recognized a loss of $179,000 and $100,000 related to hedge ineffectiveness for the three months and nine months ended September 30, 2012, respectively, which is included in oil and condensate sales in the consolidated statements of operations. The Company did not recognize into earnings any amount related to hedge ineffectiveness for the nine months ended September 30, 2011.

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Consolidated Statements Of Operations (USD $) In Thousands, except Share data, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Revenues:
Oil and condensate sales	$ 58,609	$ 56,447	$ 187,633	$ 154,559
Gas sales	973	923	2,127	3,155
Natural gas liquids sales	874	653	2,374	2,346
Other income	81	58	189	248
Total revenues	60,537	58,081	192,323	160,308
Costs and expenses:
Lease operating expenses	6,638	5,744	18,201	15,103
Production taxes	7,070	6,281	22,411	18,520
Depreciation, depletion, and amortization	25,377	14,736	70,424	40,606
General and administrative	3,098	2,034	9,370	6,209
Accretion expense	176	168	529	491
Total costs and expenses	42,359	28,963	120,935	80,929
INCOME FROM OPERATIONS:	18,178	29,118	71,388	79,379
OTHER (INCOME) EXPENSE:
Interest Expense	1,003	225	1,630	1,163
Interest income	(6)	(64)	(37)	(139)
Loss (income) from equity method investments	1,165	(52)	1,793	906
Total other (income) expense	2,162	109	3,386	1,930
INCOME BEFORE INCOME TAXES	16,016	29,009	68,002	77,449
INCOME TAX EXPENSE:	15,514		15,514	1
NET INCOME	$ 502	$ 29,009	$ 52,488	$ 77,448
NET INCOME PER COMMON SHARE:
Basic (in dollars per share)	$ 0.01	$ 0.58	$ 0.94	$ 1.63
Diluted (in dollars per share)	$ 0.01	$ 0.57	$ 0.93	$ 1.61
Weighted average common shares outstanding-Basic	55,692,664	50,407,240	55,658,507	47,549,672
Weighted average common shares outstanding-Diluted	56,291,792	50,905,962	56,174,581	48,008,368

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Other Assets

9 Months Ended

Sep. 30, 2012

Other Assets, Noncurrent Disclosure [Abstract]

Other Assets

OTHER ASSETS

Other assets consist of the following as of September 30, 2012 and December 31, 2011:

	September 30, 2012		December 31, 2011
Plugging and abandonment escrow account on the WCBB properties (Note 10)	$	3,113,000	$	3,121,000
Certificates of deposit securing letter of credit	275,000		275,000
Prepaid drilling costs	536,000		228,000
Loan commitment fees, net	1,602,000		1,495,000
Deposits	4,000		4,000
	$	5,530,000	$	5,123,000

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Equity Investments

9 Months Ended

Sep. 30, 2012

Equity Method Investments and Joint Ventures [Abstract]

Equity Investments

EQUITY INVESTMENTS

Investments accounted for by the equity method consist of the following as of September 30, 2012 and December 31, 2011:

	September 30, 2012		December 31, 2011
Investment in Tatex Thailand II, LLC	$	319,000	$	1,030,000
Investment in Tatex Thailand III, LLC	8,683,000		8,282,000
Investment in Grizzly Oil Sands ULC	164,974,000		69,008,000
Investment in Bison Drilling and Field Services LLC	14,109,000		6,366,000
Investment in Muskie Holdings LLC	5,840,000		2,138,000
Investment in Timber Wolf Terminals LLC	952,000		—
Investment in Windsor Midstream LLC	7,928,000		—
Investment in Stingray Pressure Pumping LLC	3,599,000		—
Investment in Stingray Cementing LLC	286,000		—
Investment in Blackhawk Midstream LLC	—		—
	$	206,690,000	$	86,824,000

Tatex Thailand II, LLC

The Company has a 23.5% ownership interest in Tatex Thailand II, LLC (“Tatex”). The remaining interests in Tatex are owned by entities controlled by Wexford. Tatex holds 85,122 of the 1,000,000 outstanding shares of APICO, LLC (“APICO”), an international oil and gas exploration company. APICO has a reserve base located in Southeast Asia through its ownership of concessions covering two million acres which includes the Phu Horm Field. During the nine months ended September 30, 2012, Gulfport received $710,000 in distributions, reducing its total net investment in Tatex to $319,000. The loss on equity investment related to Tatex was immaterial for the nine months ended September 30, 2012 and 2011.

Tatex Thailand III, LLC

The Company has a 17.9% ownership interest in Tatex III. Approximately 68.7% of the remaining interests in Tatex III are owned by entities controlled by Wexford. During the nine months ended September 30, 2012, Gulfport paid $627,000 in cash calls, increasing its total net investment in Tatex III to $8,683,000. The Company recognized a loss on equity investment of $226,000 and $199,000 for the nine months ended September 30, 2012 and 2011, respectively, which is included in loss (income) from equity method investments in the consolidated statements of operations.

Grizzly Oil Sands ULC

The Company, through its wholly owned subsidiary Grizzly Holdings Inc. (“Grizzly Holdings”), owns a 24.9999% interest in Grizzly Oil Sands ULC, a Canadian unlimited liability company (“Grizzly”). The remaining interest in Grizzly is owned by an entity controlled by Wexford. Since 2006, Grizzly has acquired leases in the Athabasca region located in the Alberta Province near Fort McMurray and other oil sands development projects. Grizzly has drilled core holes and water supply test wells in eleven separate lease blocks for feasibility of oil production and conducted a seismic program. In March 2010, Grizzly filed an application in Alberta, Canada for the development of a SAGD facility at Algar Lake. In November 2011, the Government of Alberta provided a formal Order-in Council authorizing the Alberta Energy Resources Conservation Board (ERCB) to issue formal regulatory approval of the project. Fabrication and onsite construction on the first phase of development at Algar Lake is currently underway. During the nine months ended September 30, 2012, Gulfport paid $93,436,000 in cash calls, increasing Gulfport’s net investment in Grizzly to $164,974,000. Grizzly’s functional currency is the Canadian dollar. The Company’s investment in Grizzly was increased by $5,320,000 and $3,394,000 as a result of a currency translation gain for the three months and nine months ended September 30, 2012, respectively. The Company recognized a loss on equity investment of $280,000 and $864,000 for the three months and nine months ended September 30, 2012, respectively, and $182,000 and $995,000 for the three months and nine months ended September 30, 2011, respectively, which is included in loss (income) from equity method investments in the consolidated statements of operations.

The Company, through Grizzly Holdings, entered into a loan agreement with Grizzly effective January 1, 2008, as amended from time-to-time, under which Grizzly borrowed funds from the Company. Interest was paid on a paid-in-kind basis by increasing the outstanding balance of the loan. The Company recognized interest income of approximately $41,000 and $117,000 for the three months and nine months ended September 30, 2011, respectively, which is included in interest income in the consolidated statements of operations. Effective December 7, 2011, Grizzly Holdings entered into a debt settlement agreement with Grizzly under which Grizzly agreed to satisfy the entire outstanding debt by issuing additional common shares of Grizzly with no effect to the composition of the ownership structure of Grizzly. At such date, the Company’s investment in Grizzly increased by the total $22,325,000 of outstanding advances and accrued interest due from Grizzly, the cumulative $75,000 currency translation loss for the note receivable was adjusted through accumulated other comprehensive income and the note receivable was considered paid in full.

Bison Drilling and Field Services LLC

During the third quarter of 2011, the Company purchased a 25% ownership interest in Bison Drilling and Field Services LLC (“Bison”) at a cost of $6,009,000, subject to adjustment. In April 2012, the Company purchased an additional 15% ownership interest in Bison for $6,152,000, bringing its total ownership interest in Bison to 40%. The remaining interests in Bison are owned by entities controlled by Wexford. Bison owns and operates drilling rigs. During the nine months ended September 30, 2012, Gulfport paid $1,373,000 in cash calls, increasing its total net investment in Bison to $14,109,000. The Company recognized a loss on equity investment of $119,000 and income on equity investment of $218,000 for the three months and nine months ended September 30, 2012, respectively, which is included in loss (income) from equity method investments in the consolidated statements of operations.

The Company entered into a loan agreement with Bison effective May 15, 2012, under which Bison may borrow funds from the Company. Interest accrues at LIBOR plus 0.28% or 8%, whichever is lower, and shall be paid on a paid-in-kind basis by increasing the outstanding balance of the loan. The loan has a maturity date of January 31, 2015. The Company loaned Bison $1,594,000 during the nine months ended September 30, 2012, all of which was repaid by Bison during the third quarter 2012. The interest income recognized on the note was immaterial for the three months and nine months ended September 30, 2012.

Muskie Holdings LLC

During the fourth quarter of 2011, the Company purchased a 25% ownership interest in Muskie Holdings LLC (“Muskie”) at a cost of $2,142,000, subject to adjustment. The remaining interests in Muskie are owned by entities controlled by Wexford. Muskie holds certain assets, real estate and rights in a lease covering land in Wisconsin that is prospective for mining oil and natural gas fracture grade sand. During the nine months ended September 30, 2012, Gulfport paid $3,884,000 in cash calls, increasing its total net investment in Muskie to $5,840,000. The Company recognized a loss on equity investment of $110,000 and $182,000 for the three months and nine months ended September 30, 2012, respectively, which is included in loss (income) from equity method investments in the consolidated statements of operations.

Timber Wolf Terminals LLC

During the first quarter of 2012, the Company purchased a 50% ownership interest in Timber Wolf Terminals LLC (“Timber Wolf”) at a cost of $1,000,000. The remaining interests in Timber Wolf are owned by entities controlled by Wexford. Timber Wolf will operate a crude/condensate terminal and a sand transloading facility in Ohio. The Company recognized a loss on equity investment of $25,000 and $48,000 for the three months and nine months months ended September 30, 2012, respectively, which is included in loss (income) from equity method investments in the consolidated statements of operations.

Windsor Midstream LLC

During the first quarter of 2012, the Company purchased a 22.5% ownership interest in Windsor Midstream LLC (“Midstream”) at a cost of $7,021,000. The remaining interests in Midstream are owned by entities controlled by Wexford. Midstream owns a 28.4% interest in MidMar Gas LLC, a gas processing plant in West Texas. During the nine months ended September 30, 2012, the Company paid $702,000 in cash calls, increasing its total net investment in Midstream to $7,928,000. The Company recognized income on equity investment of $90,000 and $205,000 for the three months and nine months ended September 30, 2012, respectively, which is included in loss (income) from equity method investments in the consolidated statements of operations.

Stingray Pressure Pumping LLC

During the second quarter of 2012, the Company purchased a 50% ownership interest in Stingray Pressure Pumping LLC ("Stingray Pressure"). The remaining interest in Stingray Pressure is owned by an entity controlled by Wexford. Stingray Pressure provides well completion services. During the nine months ended September 30, 2012, the Company paid $4,132,000 in cash calls, increasing its total net investment in Stingray Pressure to $3,599,000. The Company recognized a loss on equity investment of $446,000 and $533,000 for the three months and nine months ended September 30, 2012, which is included in loss (income) from equity method investments in the consolidated statements of operations.

Stingray Cementing LLC

During the second quarter of 2012, the Company purchased a 50% ownership interest in Stingray Cementing LLC ("Stingray Cementing"). The remaining interest in Stingray Cementing is owned by an entity controlled by Wexford. Stingray Cementing provides well cementing services. During the nine months ended September 30, 2012, the Company paid $291,000 in cash calls, increasing its net investment in Stingray Cementing to $286,000. The loss on equity investment related to Stingray Cementing was immaterial for the three months and nine months ended September 30, 2012.     

Blackhawk Midstream LLC

During the second quarter of 2012, the Company purchased a 50% ownership interest in Blackhawk Midstream LLC ("Blackhawk"). The remaining interest in Blackhawk is owned by an entity controlled by Wexford. Blackhawk coordinates gathering, compression, processing and marketing activities for the Company in connection with the development of its Utica Shale acreage. During the nine months ended September 30, 2012, the Company paid $357,000 in cash calls. The Company recognized a loss on equity investment of $113,000 and $357,000 for the three months and nine months ended September 30, 2012, which is included in loss (income) from equity method investments in the consolidated statements of operations.

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Equity Investments (Tables)

9 Months Ended

Sep. 30, 2012

Equity Method Investments and Joint Ventures [Abstract]

Investments Accounted For By The Equity Method

Investments accounted for by the equity method consist of the following as of September 30, 2012 and December 31, 2011:

	September 30, 2012		December 31, 2011
Investment in Tatex Thailand II, LLC	$	319,000	$	1,030,000
Investment in Tatex Thailand III, LLC	8,683,000		8,282,000
Investment in Grizzly Oil Sands ULC	164,974,000		69,008,000
Investment in Bison Drilling and Field Services LLC	14,109,000		6,366,000
Investment in Muskie Holdings LLC	5,840,000		2,138,000
Investment in Timber Wolf Terminals LLC	952,000		—
Investment in Windsor Midstream LLC	7,928,000		—
Investment in Stingray Pressure Pumping LLC	3,599,000		—
Investment in Stingray Cementing LLC	286,000		—
Investment in Blackhawk Midstream LLC	—		—
	$	206,690,000	$	86,824,000

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Fair Value Measurements

9 Months Ended

Sep. 30, 2012

Fair Value Disclosures [Abstract]

Fair Value Measurements

FAIR VALUE MEASUREMENTS

The Company follows FASB ASC 820 for all financial and non-financial assets and liabilities. FASB ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The statement establishes market or observable inputs as the preferred sources of values, followed by assumptions based on hypothetical transactions in the absence of market inputs. The statement requires fair value measurements be classified and disclosed in one of the following categories:

Level 1 – Quoted prices in active markets for identical assets and liabilities.

Level 2 – Quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 – Significant inputs to the valuation model are unobservable.

Financial assets and liabilities are classified based on the lowest level of input that is significant to the fair value measurement.

The following table summarizes the Company’s financial assets and liabilities by FASB ASC 820 valuation level as of September 30, 2012:

	As of September 30, 2012
	Level 1		Level 2		Level 3
Assets:
Fixed price swaps	$	—	$	808,000	$	—
Liabilities:
Fixed price swaps	$	—	$	10,339,000	$	—

The estimated fair value of the Company’s fixed price swaps was based upon forward commodity prices based on quoted market prices, adjusted for differentials.

The Company estimates asset retirement obligations pursuant to the provisions of FASB ASC Topic 410, “Asset Retirement and Environmental Obligations” (“FASB ASC 410”). The initial measurement of asset retirement obligations at fair value is calculated using discounted cash flow techniques and based on internal estimates of future retirement costs associated with oil and gas properties. Given the unobservable nature of the inputs, including plugging costs and reserve lives, the initial measurement of the asset retirement obligation liability is deemed to use Level 3 inputs. See Note 3 for further discussion of the Company’s asset retirement obligations. Asset retirement obligations incurred during the nine months ended September 30, 2012 were approximately $1,711,000.

The carrying amounts on the accompanying consolidated balance sheet for cash and cash equivalents, accounts receivable, accounts payable and accrued liabilities, and current and long-term debt are carried at cost, which approximates market value.

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Earnings Per Share

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Earnings Per Share

EARNINGS PER SHARE

A reconciliation of the components of basic and diluted net income per common share is presented in the table below:

	For the Three Months Ended September 30,
	2012					2011
	Income		Shares	Per Share		Income		Shares	Per Share
Basic:
Net income	$	502,000	55,692,664	$	0.01	$	29,009,000	50,407,240	$	0.58
Effect of dilutive securities:
Stock options and restricted stock awards	—		599,128			—		498,722
Diluted:
Net income	$	502,000	56,291,792	$	0.01	$	29,009,000	50,905,962	$	0.57

	For the Nine Months Ended September 30,
	2012					2011
	2012		Shares	Per Share		Income		Shares	Per Share
Basic:
Net income	$	52,488,000	55,658,507	$	0.94	$	77,448,000	47,549,672	$	1.63
Effect of dilutive securities:
Stock options and restricted stock awards	—		516,074			—		458,696
Diluted:
Net income	$	52,488,000	56,174,581	$	0.93	$	77,448,000	48,008,368	$	1.61

There were no potential shares of common stock that were considered anti-dilutive during the three months and nine months ended September 30, 2012 and 2011.

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Long-Term Debt

9 Months Ended

Sep. 30, 2012

Long-term Debt, Unclassified [Abstract]

Long-Term Debt

LONG-TERM DEBT

A breakdown of long-term debt as of September 30, 2012 and December 31, 2011 is as follows:

	September 30, 2012			December 31, 2011
Revolving credit agreement (1)	$	141,000,000		$	—
Building loans (2)	2,180,000			2,283,000
Less: current maturities of long term debt	(147,000		)	(141,000		)
Debt reflected as long term	$	143,033,000		$	2,142,000

Maturities of long-term debt as of September 30, 2012 are as follows:

2013	$	147,000
2014	156,000
2015	141,166,000
2016	1,711,000
2017	—
Thereafter	—
Total	$	143,180,000

(1) On September 30, 2010, the Company entered into a $100.0 million senior secured revolving credit agreement with The Bank of Nova Scotia, as administrative agent and letter of credit issuer and lead arranger, and Amegy Bank National Association. The revolving credit facility initially matured on September 30, 2013 and had an initial borrowing base availability of $50.0 million, which was increased to $65.0 million effective December 24, 2010. The credit agreement is secured by substantially all of the Company’s assets. The Company’s wholly-owned subsidiaries guaranteed the obligations of the Company under the credit agreement.

On May 3, 2011, the Company entered into a first amendment to the revolving credit agreement with The Bank of Nova Scotia, Amegy Bank, Key Bank National Association (“Key Bank”) and Société Générale. Pursuant to the terms of the first amendment, Key Bank and Société Générale were added as additional lenders, the maximum amount of the facility was increased to $350.0 million, the borrowing base was increased to $90.0 million, certain fees and rates payable by the Company under the credit agreement were decreased, and the maturity date was extended until May 3, 2015. On October 31, 2011, the Company entered into additional amendments to its revolving credit facility pursuant to which, among other things, the borrowing base under this facility was increased to $125.0 million. Effective May 2, 2012, the Company entered into additional amendments to its revolving credit facility pursuant to which, among other things, the borrowing base was increased to $155.0 million and Credit Suisse, Deutsche Bank Trust Company Americas and Iberiabank were added as additional lenders and Société Générale left the bank group. As of September 30, 2012, approximately $141,000,000 was outstanding under the revolving credit facility.

On October 9, 2012, the Company entered into an amendment to its revolving credit facility that modified certain covenants to permit the offering of its 7.750% Senior Notes due 2012 ("the Note Offering") described in Note 14 below. The Note Offering closed on October 17, 2012 and the Company repaid all indebtedness outstanding under its revolving credit facility on that date with a portion of the proceeds from the Note Offering. Effective as of October 17, 2012, the Company amended its revolving credit facility to lower the applicable rates (i) from a range of 1.00% to 1.75% to a range of 0.75% to 1.50% for the base rate loans and (ii) from a range of 2.00% to 2.75% to a range of 1.75% to 2.50% for the Eurodollar rate loans and letters of credit. This amendment also lowered the commitment fees for Level 1 and Level 2 usage levels, in each case, from 0.50% per annum to 0.375% per annum. Also, effective as of October 17, 2012, in connection with the completion of the Note Offering and the Contribution, the Company's borrowing base under the credit facility was reduced to $45.0 million until the next borrowing base redetermination.

Advances under the revolving credit facility, as amended, may be in the form of either base rate loans or eurodollar loans. The interest rate for base rate loans is equal to (1) the applicable rate, which ranges from 0.75% to 1.50%, plus (2) the highest of: (a) the federal funds rate plus 0.5%, (b) the rate of interest in effect for such day as publicly announced from time to time by agent as its “prime rate,” and (c) the eurodollar rate for an interest period of one month plus 1.00%. The interest rate for eurodollar loans is equal to (1) the applicable rate, which ranges from 1.75% to 2.50%, plus (2) the London interbank offered rate that appears on Reuters Screen LIBOR01 Page for deposits in U.S. dollars, or, if such rate is not available, the offered rate on such other page or service that displays the average British Bankers Association Interest Settlement Rate for deposits in U.S. dollars, or, if such rate is not available, the average quotations for three major New York money center banks of whom the agent shall inquire as the “London Interbank Offered Rate” for deposits in U.S. dollars. At September 30, 2012, amounts borrowed under the revolving credit facility bore interest at the eurodollar rate (2.98%).

The revolving credit facility contains customary negative covenants including, but not limited to, restrictions on the Company’s and its subsidiaries’ ability to: incur indebtedness; grant liens; pay dividends and make other restricted payments; make investments; make fundamental changes; enter into swap contracts and forward sales contracts; dispose of assets; change the nature of their business; and enter into transactions with their affiliates. The negative covenants are subject to certain exceptions as specified in the credit agreement. The revolving credit facility also contains certain affirmative covenants, including, but not limited to the following financial covenants: (1) the ratio of funded debt to EBITDAX (net income, excluding any non-cash revenue or expense associated with swap contracts resulting from ASC 815, plus without duplication and to the extent deducted from revenues in determining net income, the sum of (a) the aggregate amount of consolidated interest expense for such period, (b) the aggregate amount of income, franchise, capital or similar tax expense (other than ad valorem taxes) for such period, (c) all amounts attributable to depletion, depreciation, amortization and asset or goodwill impairment or writedown for such period, (d) all other non-cash charges, (e) non-cash losses from minority investments, (f) actual cash distributions received from minority investments, (g) to the extent actually reimbursed by insurance, expenses with respect to liability on casualty events or business interruption, and (h) all reasonable transaction expenses related to dispositions and acquisitions of assets, investments and debt and equity offerings, and less non-cash income attributable to equity income from minority investments) for a twelve-month period may not be greater than 2.00 to 1.00; and (2) the ratio of EBITDAX to interest expense for a twelve-month period may not be less than 3.00 to 1.00. The Company was in compliance with these financial covenants at September 30, 2012.

(2) In March 2011, the Company entered into a new building loan agreement for the office building it occupies in Oklahoma City, Oklahoma. The new loan agreement refinanced the $2.4 million outstanding under the previous building loan agreement. The new agreement extended the maturity date of the building loan to February 2016 and reduced the interest rate to 5.82% per annum. The new building loan requires monthly interest and principal payments of approximately $22,000 and is collateralized by the Oklahoma City office building and associated land.

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Stock-Based Compensation

9 Months Ended

Sep. 30, 2012

Share-based Compensation [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

During the three months and nine months ended September 30, 2012, the Company’s stock-based compensation expense was $1,157,000 and $3,427,000, respectively, of which the Company capitalized $463,000 and $1,371,000, respectively, relating to its exploration and development efforts. During the three months and nine months ended September 30, 2011, the Company’s stock-based compensation expense was $384,000 and $837,000, respectively, of which the Company capitalized $154,000 and $335,000, respectively, relating to its exploration and development efforts.

Options and restricted common stock are reported as share based payments and their fair value is amortized to expense using the straight-line method over the vesting period. The shares of stock issued once the options are exercised will be from authorized but unissued common stock.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model that uses certain assumptions. Expected volatilities are based on the historical volatility of the market price of Gulfport’s common stock over a period of time ending on the grant date. Based upon historical experience of the Company, the expected term of options granted is equal to the vesting period plus one year. The risk-free rate for periods within the contractual life of the option is based on the U.S. Treasury yield curve in effect at the time of the grant. The 2005 Stock Incentive Plan provides that all options must have an exercise price not less than the fair value of the Company’s common stock on the date of the grant.

No stock options were issued during the nine months ended September 30, 2012 and 2011.

The Company has not declared dividends and does not intend to do so in the foreseeable future, and thus did not use a dividend yield. In each case, the actual value that will be realized, if any, depends on the future performance of the common stock and overall stock market conditions. There is no assurance that the value an optionee actually realizes will be at or near the value estimated using the Black-Scholes model.

A summary of the status of stock options and related activity for the nine months ended September 30, 2012 is presented below:

	Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding at December 31, 2011	356,241	$	6.51	3.41	$	8,172,000
Granted	—	—
Exercised	—	—
Forfeited/expired	—	—
Options outstanding at September 30, 2012	356,241	$	6.51	2.66	$	8,816,000
Options exercisable at September 30, 2012	356,241	$	6.51	2.66	$	8,816,000

The following table summarizes information about the stock options outstanding at September 30, 2012:

Exercise Price		Number Outstanding	Weighted Average Remaining Life (in years)	Number Exercisable
$	3.36	206,241	2.31	206,241
$	9.07	25,000	2.94	25,000
$	11.20	125,000	3.17	125,000
		356,241		356,241

The following table summarizes restricted stock activity for the nine months ended September 30, 2012:

	Number of Unvested Restricted Shares		Weighted Average Grant Date Fair Value
Unvested shares as of December 31, 2011	203,348		$	26.02
Granted	183,500		36.09
Vested	(96,331	)	30.17
Forfeited	(9,334	)	22.76
Unvested shares as of September 30, 2012	281,183		$	31.28

Unrecognized compensation expense as of September 30, 2012 related to outstanding stock options and restricted shares was $7,801,000. The expense is expected to be recognized over a weighted average period of 1.69 years.

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New Accounting Standards

9 Months Ended

Sep. 30, 2012

New Accounting Pronouncements and Changes in Accounting Principles [Abstract]

New Accounting Standards

NEW ACCOUNTING STANDARDS

In May 2011, the FASB issued Accounting Standards Update No. 2011-04, “Fair Value Measurement: Amendments to Achieve Common Fair Value Measurement and Disclosure Requirements in U.S. GAAP and IFRS,” which provides amendments to FASB ASC Topic 820, “Fair Value Measurements and Disclosure” (“FASB ASC 820”). The purpose of the amendments in this update is to create common fair value measurement and disclosure requirements between GAAP and IFRS. The amendments change certain fair value measurement principles and enhance the disclosure requirements. The amendments to FASB ASC 820 are effective for interim and annual periods beginning after December 15, 2011. The adoption did not have a material impact on the Company’s consolidated financial statements.

In June 2011, the FASB issued Accounting Standards Update No. 2011-05, “Comprehensive Income: Presentation of Comprehensive Income,” which provides amendments to FASB ASC Topic 220, “Comprehensive Income” (“FASB ASC 220”). The purpose of the amendments in this update is to provide a more consistent method of presenting non-owner transactions that affect an entity’s equity. The amendments eliminate the option to report other comprehensive income and its components in the statement of changes in stockholders’ equity and require an entity to present the total of comprehensive income, the components of net income and the components of other comprehensive income either in a single continuous statement or in two separate but consecutive statements. The amendments to FASB ASC 220 are effective for interim and annual periods beginning after December 15, 2011 and should be applied retrospectively. The components of other comprehensive income and total comprehensive income are presented in the accompanying consolidated statements of comprehensive income (loss).

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Property And Equipment (Summary Of Oil And Gas Properties Not Subject To Amortization) (Details) (USD $) In Thousands, unless otherwise specified			9 Months Ended
	Sep. 30, 2012	Dec. 31, 2011	Sep. 30, 2012 Minimum [Member]	Sep. 30, 2012 Maximum [Member]	Sep. 30, 2012 West Texas Permian	Sep. 30, 2012 Colorado	Sep. 30, 2012 Bakken	Sep. 30, 2012 Southern Louisiana	Sep. 30, 2012 Ohio	Sep. 30, 2012 Belize	Sep. 30, 2012 Other
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items]
Anticipated Timing of Inclusion of Costs in Amortization Calculation			3 years	5 years
Capitalized costs of oil and natural gas properties excluded from amortization	$ 234,630	$ 138,623			$ 14,661	$ 5,871	$ 300	$ 761	$ 207,281	$ 5,711	$ 45

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Hedging Activities (Schedule Of Cash Flow Hedges) (Details) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
General Discussion of Derivative Instruments and Hedging Activities [Abstract]
Reduction to oil and condensate sales	$ (185)	$ (1,331)	$ (646)	$ (3,342)

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Subsequent Events

9 Months Ended

Sep. 30, 2012

Subsequent Events [Abstract]

Subsequent Events

SUBSEQUENT EVENTS

On October 17, 2012, the Company issued $250 million in aggregate principal amount of 7.750% Senior Notes due 2020 (the “Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act under an indenture among the Company, the Company's subsidiary guarantors and Wells Fargo Bank, National Association, as the trustee. Pursuant to the indenture, interest on the Notes will accrue at a rate of 7.750% per annum on the outstanding principal amount from October 17, 2012, payable semi-annually on May 1 and November 1 of each year, commencing on May 1, 2013.

The Notes are senior unsecured obligations and rank equally in the right of payment with all of the Company's other senior indebtedness and senior in right of payment to any of the Company's future subordinated indebtedness. All of the Company's existing and future restricted subsidiaries that guarantee its secured revolving credit facility or certain other debt guarantee the Notes, provided, however, that the Notes are not guaranteed by Grizzly Holdings, Inc. and will not be guaranteed by any of the Company's future unrestricted subsidiaries. The guarantees rank equally in the right of payment with all of the senior indebtedness of the subsidiary guarantors and senior in the right of payment to any future subordinated indebtedness of the subsidiary guarantors. The Notes and the guarantees are effectively subordinated to all of the Company's and the subsidiary guarantors' secured indebtedness (including all borrowings and other obligations under its revolving credit facility) to the extent of the value of the collateral securing such indebtedness, and structurally subordinated to all indebtedness and other liabilities of any of the Company's subsidiaries that do not guarantee the Notes.

The Company may redeem some or all of the Notes at any time on or after November 1, 2016, at the redemption prices listed in the indenture. Prior to November 1, 2016, the Company may redeem the Notes at a price equal to 100% of the principal amount plus a “make-whole” premium. In addition, prior to November 1, 2015, the Company may redeem up to 35% of the aggregate principal amount of the Notes with the net proceeds of certain equity offerings, provided that at least 65% of the aggregate principal amount of the Notes initially issued remains outstanding immediately after such redemption.

If the Company experiences a change of control (as defined in the indenture), it will be required to make an offer to repurchase the Notes at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase. If the Company sells certain assets and fails to use the proceeds in a manner specified in the indenture, it will be required to use the remaining proceeds to make an offer to repurchase the Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase.

The indenture contains certain covenants that, subject to certain exceptions and qualifications, among other things, limit the Company's ability and the ability of its restricted subsidiaries to incur or guarantee additional indebtedness, make certain investments, declare or pay dividends or make distributions on capital stock, prepay subordinated indebtedness, sell assets including capital stock of restricted subsidiaries, agree to payment restrictions affecting the Company's restricted subsidiaries, consolidate, merge, sell or otherwise dispose of all or substantially all of the Company's assets, enter into transactions with affiliates, incur liens, engage in business other than the oil and gas business and designate certain of the Company's subsidiaries as unrestricted subsidiaries.

On October 17, 2012, the Company repaid all outstanding indebtedness under its revolving credit facility with a portion of the net proceeds from the Note Offering. The Company intends to use the remaining net proceeds for general corporate purposes, including the funding of a portion of its 2012 and 2013 capital development plans.

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Stock-Based Compensation (Tables)

9 Months Ended

Sep. 30, 2012

Share-based Compensation [Abstract]

Summary Of Stock Option Activity

A summary of the status of stock options and related activity for the nine months ended September 30, 2012 is presented below:

	Shares	Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value
Options outstanding at December 31, 2011	356,241	$	6.51	3.41	$	8,172,000
Granted	—	—
Exercised	—	—
Forfeited/expired	—	—
Options outstanding at September 30, 2012	356,241	$	6.51	2.66	$	8,816,000
Options exercisable at September 30, 2012	356,241	$	6.51	2.66	$	8,816,000

Summary Of Stock Option Plans By Exercise Price

The following table summarizes information about the stock options outstanding at September 30, 2012:

Exercise Price		Number Outstanding	Weighted Average Remaining Life (in years)	Number Exercisable
$	3.36	206,241	2.31	206,241
$	9.07	25,000	2.94	25,000
$	11.20	125,000	3.17	125,000
		356,241		356,241

Summary Of Restricted Stock Award And Unit Activity

The following table summarizes restricted stock activity for the nine months ended September 30, 2012:

	Number of Unvested Restricted Shares		Weighted Average Grant Date Fair Value
Unvested shares as of December 31, 2011	203,348		$	26.02
Granted	183,500		36.09
Vested	(96,331	)	30.17
Forfeited	(9,334	)	22.76
Unvested shares as of September 30, 2012	281,183		$	31.28

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Hedging Activities (Schedule Of Derivative Instruments) (Details)	9 Months Ended
	Sep. 30, 2012
October - December 2012
Derivative [Line Items]
Production Barrels Per Day	4,000
Production Barrels Per Day Weighted Average Price (usd per barrel)	107.29
January - June 2013
Derivative [Line Items]
Production Barrels Per Day	4,000
Production Barrels Per Day Weighted Average Price (usd per barrel)	103.33
July - December 2013
Derivative [Line Items]
Production Barrels Per Day	3,000
Production Barrels Per Day Weighted Average Price (usd per barrel)	100.04

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Long-Term Debt (Maturities Of Long-Term Debt) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012
Long-term Debt, Unclassified [Abstract]
2013	$ 147
2014	156
2015	141,166
2016	1,711
Total	$ 143,180

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Consolidated Statements Of Comprehensive Income (Loss) (USD $) In Thousands, unless otherwise specified	3 Months Ended		9 Months Ended
	Sep. 30, 2012	Sep. 30, 2011	Sep. 30, 2012	Sep. 30, 2011
Statement of Income and Comprehensive Income [Abstract]
Net income	$ 502	$ 29,009	$ 52,488	$ 77,448
Foreign currency translation adjustment	5,320	(4,855)	3,394	(3,285)
Change in fair value of derivative instruments	(19,251)	10,333	(11,678)	9,611
Reclassification of settled contracts	185	1,331	646	3,342
Other comprehensive income (loss)	(13,746)	6,809	(7,638)	9,668
Comprehensive income (loss)	$ (13,244)	$ 35,818	$ 44,850	$ 87,116

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Property And Equipment

9 Months Ended

Sep. 30, 2012

Property, Plant and Equipment [Abstract]

Property And Equipment

PROPERTY AND EQUIPMENT

The major categories of property and equipment and related accumulated depletion, depreciation, amortization and impairment as of September 30, 2012 and December 31, 2011 are as follows:

	September 30, 2012			December 31, 2011
Oil and natural gas properties	$	1,342,715,000		$	1,035,754,000
Office furniture and fixtures	4,437,000			3,692,000
Building	3,926,000			4,049,000
Land	260,000			283,000
Total property and equipment	1,351,338,000			1,043,778,000
Accumulated depletion, depreciation, amortization and impairment	(645,560,000		)	(575,142,000		)
Property and equipment, net	$	705,778,000		$	468,636,000

Included in oil and gas properties at September 30, 2012 is the cumulative capitalization of $29,664,000 in general and administrative costs incurred and capitalized to the full cost pool. General and administrative costs capitalized to the full cost pool represent management’s estimate of costs incurred directly related to exploration and development activities such as geological and other administrative costs associated with overseeing the exploration and development activities. All general and administrative costs not directly associated with exploration and development activities were charged to expense as they were incurred. Capitalized general and administrative costs were approximately $2,034,000 and $6,170,000 for the three months and nine months ended September 30, 2012, respectively, and $1,338,000 and $4,126,000 for the three months and nine months ended September 30, 2011, respectively.

The following table summarizes the Company’s non-producing properties excluded from amortization by area at September 30, 2012:

	September 30, 2012
West Texas Permian	$	14,661,000
Colorado	5,871,000
Bakken	300,000
Southern Louisiana	761,000
Ohio	207,281,000
Belize	5,711,000
Other	45,000
	$	234,630,000

The Company evaluates the costs excluded from its amortization calculation at least annually. Subject to industry conditions and the level of the Company’s activities, the inclusion of most of the above referenced costs into the Company’s amortization calculation is expected to occur within three to five years.

A reconciliation of the asset retirement obligation for the nine months ended September 30, 2012 and 2011 is as follows:

	September 30, 2012			September 30, 2011
Asset retirement obligation, beginning of period	$	12,653,000		$	10,845,000
Liabilities incurred	1,711,000			939,000
Liabilities settled	(1,002,000		)	—
Accretion expense	529,000			491,000
Asset retirement obligation as of end of period	13,891,000			12,275,000
Less current portion	60,000			635,000
Asset retirement obligation, long-term	$	13,831,000		$	11,640,000

On May 7, 2012, the Company entered into a contribution agreement with Diamondback Energy, Inc., (“Diamondback”). Under the terms of the contribution agreement, the Company agreed to contribute to Diamondback, prior to the closing of the Diamondback initial public offering (“Diamondback IPO”), all its oil and gas interests in the Permian Basin (the "Contribution"). The Contribution was completed on October 11, 2012. At the closing of the Contribution, Diamondback issued to the Company (i) 7,914,036 shares of Diamondback common stock and (ii) a promissory note for $63.6 million, which was repaid to the Company at the closing of the Diamondback IPO on October 17, 2012. This aggregate consideration is subject to a post-closing cash adjustment based on changes in the working capital, long-term debt and other items of Windsor Permian LLC (“Windsor Permian”) referred to in the contribution agreement as of the date of the Contribution. Windsor Permian is a wholly-owned subsidiary of Diamondback. If the Contribution had closed on September 30, 2012, based on Diamondback's preliminary estimates, Diamondback would have owed Gulfport approximately $16.0 million for this post-closing adjustment. However, the actual amount due based on the October 11, 2012 closing date has not been determined, and the actual amount may vary materially from the estimated amount on September 30, 2012. Under the contribution agreement, the Company is generally responsible for all liabilities and obligations with respect to the contributed properties arising prior to the Contribution and Diamondback is responsible for such liabilities and obligations with respect to the contributed properties arising after the Contribution.

In connection with the Contribution, the Company and Diamondback entered into an investor rights agreement under which the Company has the right, for so long as it beneficially owns more than 10% of Diamondback’s outstanding common stock, to designate one individual as a nominee to serve on Diamondback’s board of directors. Such nominee, if elected to Diamondback’s board, will also serve on each committee of the board so long as he or she satisfies the independence and other requirements for service on the applicable committee of the board. So long as the Company has the right to designate a nominee to Diamondback’s board and there is no Gulfport nominee actually serving as a Diamondback director, the Company has the right to appoint one individual as an advisor to the board who shall be entitled to attend board and committee meetings. The Company is also entitled to certain information rights and Diamondback granted the Company certain demand and “piggyback” registration rights obligating Diamondback to register with the Securities and Exchange Commission (the "SEC") any shares of Diamondback common stock that the Company owns. Immediately upon completion of the Contribution, the Company owned a 35% equity interest in Diamondback, rather than leasehold interests in the Company’s Permian Basin acreage. Upon completion of the Diamondback IPO on October 17, 2012, Gulfport owned approximately 22.5% of Diamondback's outstanding common stock. On October 18, 2012, the underwriters of the Diamondback IPO exercised in full their option to purchase additional shares of common stock of Diamondback and, upon the closing of such purchase on October 23, 2012, Gulfport owned approximately 21.4% of Diamondback's outstanding common stock. The Company's investment in Diamondback will be accounted for as an equity method investment going forward.

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Earnings Per Share (Tables)

9 Months Ended

Sep. 30, 2012

Earnings Per Share [Abstract]

Schedule Of Earnings Per Share Reconciliation

A reconciliation of the components of basic and diluted net income per common share is presented in the table below:

	For the Three Months Ended September 30,
	2012					2011
	Income		Shares	Per Share		Income		Shares	Per Share
Basic:
Net income	$	502,000	55,692,664	$	0.01	$	29,009,000	50,407,240	$	0.58
Effect of dilutive securities:
Stock options and restricted stock awards	—		599,128			—		498,722
Diluted:
Net income	$	502,000	56,291,792	$	0.01	$	29,009,000	50,905,962	$	0.57

	For the Nine Months Ended September 30,
	2012					2011
	2012		Shares	Per Share		Income		Shares	Per Share
Basic:
Net income	$	52,488,000	55,658,507	$	0.94	$	77,448,000	47,549,672	$	1.63
Effect of dilutive securities:
Stock options and restricted stock awards	—		516,074			—		458,696
Diluted:
Net income	$	52,488,000	56,174,581	$	0.93	$	77,448,000	48,008,368	$	1.61

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Other Assets (Schedule Of Other Assets) (Details) (USD $) In Thousands, unless otherwise specified	Sep. 30, 2012	Dec. 31, 2011
Other Assets, Noncurrent Disclosure [Abstract]
Plugging and abandonment escrow account on the WCBB properties (Note 10)	$ 3,113	$ 3,121
Certificates of Deposit securing letter of credit	275	275
Prepaid drilling costs	536	228
Loan commitment fees, net	1,602	1,495
Deposits	4	4
Other assets	$ 5,530	$ 5,123

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Income Taxes

9 Months Ended

Sep. 30, 2012

Income Tax Disclosure [Abstract]

Income Taxes

INCOME TAXES

At September 30, 2012, the Company revised the projected annual effective rate based upon the latest taxable income forecast that includes the impact of the Diamondback Contribution discussed in Note 3.  As a result, the Company determined on a more likely than not basis, it would recognize approximately $8,992,000 of its deferred tax assets which had previously been subject to a valuation allowance.  In addition, the Company recognized a $15,514,000 deferred income tax expense due to the revised projected annual effective rate, which is included in income tax expense in the consolidated statements of operations.  The Company continues to provide a valuation allowance of approximately $3,355,000 against certain state net operating losses which may expire before utilization.