Stock-Based Compensation

9 Months Ended

Sep. 30, 2013

Share-based Compensation [Abstract]

Stock-Based Compensation

STOCK-BASED COMPENSATION

During the three and nine months ended September 30,2013, the Company’s stock-based compensation cost was $1.6 million and $4.6 million, respectively, of which the Company capitalized $0.6 million and $1.8 million, respectively, relating to its exploration and development efforts. During the three and nine months ended September 30,2012, the Company's stock-based compensation cost was $1.2 million and $3.4 million, respectively, of which the Company capitalized $0.5 million and $1.4 million, respectively, relating to its exploration and development efforts.

The fair value of each option award is estimated on the date of grant using the Black-Scholes option valuation model. 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 the 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 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 30,2013 and 2012.

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 30,2013 is presented below:

	Shares		Weighted Average Exercise Price per Share		Weighted Average Remaining Contractual Term	Aggregate Intrinsic Value (In thousands)
Options outstanding at December 31, 2012	335,241		$	6.37	2.39	$	10,678
Granted	—		—
Exercised	(125,000	)	11.20			$	4,797
Forfeited/expired	—		—
Options outstanding at September 30, 2013	210,241		$	3.50	1.32	$	12,792
Options exercisable at September 30, 2013	210,241		$	3.50	1.32	$	12,792

The following table summarizes information about the stock options outstanding at September 30, 2013:

Exercise Price		Number Outstanding	Weighted Average Remaining Life (in years)	Number Exercisable
$	3.36	205,241	1.31	205,241
$	9.07	5,000	1.94	5,000
		210,241		210,241

The following table summarizes restricted stock activity for the nine months ended September 30,2013:

	Number of Unvested Restricted Shares		Weighted Average Grant Date Fair Value
Unvested shares as of December 31, 2012	245,831		$	31.88
Granted	209,500		38.98
Vested	(119,519	)	35.58
Forfeited	(8,500	)	38.54
Unvested shares as of September 30, 2013	327,312		$	34.90

Unrecognized compensation expense as of September 30, 2013 related to outstanding stock options and restricted shares was $10.0 million. The expense is expected to be recognized over a weighted average period of1.66 years.