SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES (UNAUDITED)

As discussed above in Notes 4 and 5, the Company owned a 7.2% equity interest in Diamondback at December 31, 2013 which interest is shown below. At December 31, 2012, the Company owned a 21.4% equity interest in Diamondback. The Company did not own an equity interest in Diamondback at December 31, 2011.

The following is historical revenue and cost information relating to the Company’s oil and gas operations located entirely in the United States:

Capitalized Costs Related to Oil and Gas Producing Activities



	2013			2012
	(In thousands)
Proven properties	$	1,526,588		$	984,795
Unproven properties	950,590			626,295
	2,477,178			1,611,090
Accumulated depreciation, depletion, amortization and impairment reserve	(779,561		)	(661,442		)
Net capitalized costs	$	1,697,617		$	949,648

Equity investment in Diamondback Energy, Inc.
Proven properties	$	92,074		$	123,370
Unproven properties	26,608			25,947
	118,682			149,317
Accumulated depreciation, depletion, amortization and impairment reserve	$	(15,180	)	$	(31,052	)
Net capitalized costs	$	103,502		$	118,265

Costs Incurred in Oil and Gas Property Acquisition and Development Activities



	2013		2012		2011
	(In thousands)
Acquisition	$	338,153	$	513,904	$	119,522
Development of proved undeveloped properties	408,121		121,787		123,489
Exploratory	26,174		93,397		3,994
Recompletions	44,633		24,643		17,259
Capitalized asset retirement obligation	3,556		2,195		1,390
Total	$	820,637	$	755,926	$	265,654

Equity investment in Diamondback Energy, Inc.
Acquisition	$	44,534	$	49,895	$	—
Development of proved undeveloped properties	6,369		22,740		—
Exploratory	17,491		3,755		—
Capitalized asset retirement obligation	50		203		—
Total	$	68,444	$	76,593	$	—

Results of Operations for Producing Activities

The following schedule sets forth the revenues and expenses related to the production and sale of oil and gas. The income tax expense is calculated by applying the current statutory tax rates to the revenues after deducting costs, which include depreciation, depletion and amortization allowances, after giving effect to the permanent differences. The results of operations exclude general office overhead and interest expense attributable to oil and gas production.



	2013			2012			2011
	(In thousands)
Revenues	$	262,225		$	248,601		$	228,953
Production costs	(64,666		)	(53,708		)	(47,230		)
Depletion	(118,118		)	(90,230		)	(61,965		)
	79,441			104,663			119,758
Income tax expense (benefit)
Current	—			730			282
Deferred	49,447			25,633			(372		)
	49,447			26,363			(90		)
Results of operations from producing activities	$	29,994		$	78,300		$	119,848
Depletion per barrel of oil equivalent (BOE)	$	28.68		$	35.07		$	26.56

Results of Operations from equity method investment in Diamondback Energy, Inc.
Revenues	$	14,976		$	16,042		$	—
Production costs	(2,518		)	(4,474		)	—
Depletion	(4,754		)	(5,515		)	—
	7,704			6,053			—
Income tax expense (benefit)	2,286			2,158			—

Results of operations from producing activities	$	5,418		$	3,895		$	—

Oil and Gas Reserves

The following table presents estimated volumes of proved developed and undeveloped oil and gas reserves as of December 31, 2013, 2012 and 2011 and changes in proved reserves during the last three years. The reserve reports use an average price equal to the unweighted arithmetic average of hydrocarbon prices received on a field-by-field basis on the first day of each month within the 12-month period ended December 31, 2013, 2012 and 2011, in accordance with guidelines of the SEC applicable to reserves estimates. Volumes for oil are stated in thousands of barrels (MBbls) and volumes for gas are stated in millions of cubic feet (MMcf). The prices used for the 2013 reserve report are $96.78 per barrel of oil, $3.67 per MMbtu and $41.23 per barrel for NGLs, adjusted by lease for transportation fees and regional price differentials, and for oil and gas reserves, respectively. The prices used at December 31, 2012 and 2011 for reserve report purposes are $91.32 per barrel and $2.76 per MMbtu and $96.19 per barrel and $4.12 per MMbtu, respectively.

Gulfport emphasizes that the volumes of reserves shown below are estimates which, by their nature, are subject to revision. The estimates are made using all available geological and reservoir data, as well as production performance data. These estimates are reviewed annually and revised, either upward or downward, as warranted by additional performance data.



	2013						2012						2011
	Oil		Gas		NGL		Oil		Gas		NGL		Oil		Gas		NGL
	(MBbls)		(MMcf)		(MBbls)		(MBbls)		(MMcf)		(MBbls)		(MBbls)		(MMcf)		(MBbls)
Proved Reserves
Beginning of the period	8,106		33,771		145		13,954		15,728		2,791		16,597		16,158		3,107
Purchases in oil and gas reserves in place	—		—		—		—		—		—		2		19		—
Extensions and discoveries	2,765		123,597		5,850		4,732		31,265		148		3,723		2,091		217
Sales of oil and gas reserves in place	—		—		—		(7,875	)	(11,757	)	(2,729	)	—		—		—
Revisions of prior reserve estimates	(208	)	(2,031	)	—		(382	)	(357	)	—		(4,240	)	(1,662	)	(474	)
Current production	(2,317	)	(8,891	)	(320	)	(2,323	)	(1,108	)	(65	)	(2,128	)	(878	)	(59	)
End of period	8,346		146,446		5,675		8,106		33,771		145		13,954		15,728		2,791
Proved developed reserves	5,609		94,552		3,527		5,175		18,482		44		6,780		6,152		705
Proved undeveloped reserves	2,737		51,894		2,148		2,931		15,289		101		7,174		9,576		2,086

Equity investment in Diamondback Energy, Inc.
Proved Reserves
Beginning of the period	5,606		7,398		1,766		3,874		4,398		1,080		—		—		—
Change in ownership interest in Diamondback	(3,720	)	(4,909	)	(1,171	)	—		—		—		—		—		—
Purchases in oil and gas reserves in place	528		752		120		1,543		2,292		540		—		—		—
Extensions and discoveries	1,227		1,741		331		665		804		186		—		—		—
Revisions of prior reserve estimates	(428	)	(417	)	(249	)	(314	)	82		(1	)	—		—		—
Current production	(146	)	(124	)	(26	)	(162	)	(178	)	(39	)	—		—		—
End of period	3,067		4,441		771		5,606		7,398		1,766		—		—		—
Proved developed reserves	1,425		2,263		358		1,539		2,753		641		—		—		—
Proved undeveloped reserves	1,642		2,178		413		4,068		4,645		1,124		—		—		—

In 2013, the Company experienced extensions and discoveries of 27,805 thousand barrels of oil equivalent (MBOE) of proved reserves attributable to the development of the Company's Utica Shale acreage. The Company contributed its Permian Basin assets to Diamondback in 2012, as discussed in Note 4, resulting in a decrease of 12,564 MBOE in estimated proved reserves in 2012. The Company experienced extensions and discoveries of proved reserves of 6,675 MBOE in 2012 attributable to the discovery and development of the Company's Utica Shale acreage. In addition, the Company experienced downward reserve revisions of 442 MBOE in estimated proved reserves in 2012 primarily due to a change in the drilling schedule of its Niobrara acreage. The Company also experienced downward reserve revisions in 2011. These downward revisions were primarily the result of the drilling of PUDs during the Company’s 2011 drilling program and ethane takeaway issues in the Permian Basin.

Discounted Future Net Cash Flows

The following tables present the estimated future cash flows, and changes therein, from Gulfport’s proven oil and gas reserves as of December 31, 2013, 2012 and 2011 using an unweighted average first-of-the-month price for the period January through December 31, 2013, 2012 and 2011.

Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves



	Year ended December 31,
	2013			2012			2011
	(In thousands)
Future cash flows	$	1,657,708		$	954,833		$	1,594,050
Future development and abandonment costs	(272,500		)	(159,113		)	(306,810		)
Future production costs	(274,428		)	(147,024		)	(295,383		)
Future production taxes	(78,647		)	(89,175		)	(124,739		)
Future income taxes	(172,691		)	(114,867		)	(229,649		)
Future net cash flows	859,442			444,654			637,469
10% discount to reflect timing of cash flows	(280,976		)	(96,013		)	(260,788		)
Standardized measure of discounted future net cash flows	$	578,466		$	348,641		$	376,681

Equity investment in Diamondback Energy, Inc. Standardized measure of discounted cash flows
Future cash flows	$	331,505		$	592,669		$	—
Future development and abandonment costs	(37,229		)	(115,869		)	—
Future production costs	(58,096		)	(165,553		)	—
Future production taxes	(22,925		)	(30,122		)	—
Future income taxes	(48,547		)	(71,669		)	—
Future net cash flows	164,708			209,456			—
10% discount to reflect timing of cash flows	(94,462		)	(130,871		)	—
Standardized measure of discounted future net cash flows	$	70,246		$	78,585		$	—

In order to develop its proved undeveloped reserves according to the drilling schedule used by the engineers in Gulfport’s reserve report, the Company will need to spend $135.4 million, $68.7 million and $8.5 million during years 2014, 2015 and 2016, respectively.

Changes in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves



	Year ended December 31,
	2013			2012			2011
	(In thousands)
Sales and transfers of oil and gas produced, net of production costs	$	(197,559	)	$	(194,893	)	$	(181,723	)
Net changes in prices, production costs, and development costs	65,573			108,941			136,071
Acquisition of oil and gas reserves in place	—			—			72
Extensions and discoveries	130,826			151,654			107,110
Previously estimated development costs incurred during the period	43,478			10,211			41,193
Revisions of previous quantity estimates, less related production costs	(3,591		)	(10,504		)	(112,553		)
Sales of reserves in place	—			(214,867		)	—
Accretion of discount	34,864			37,668			31,549
Net changes in income taxes	(30,239		)	25,585			(36,674		)
Change in production rates and other	186,473			58,165			76,149
Total change in standardized measure of discounted future net cash flows	$	229,825		$	(28,040	)	$	61,194

Equity investment in Diamondback Energy, Inc. Changes in standardized measure of discounted cash flows
Change in ownership interest in Diamondback	$	(52,145	)	$	—		$	—
Sales and transfers of oil and gas produced, net of production costs	(12,524		)	(11,601		)	—
Net changes in prices, production costs, and development costs	3,312			(14,596		)	—
Acquisition of oil and gas reserves in place	21,968			23,090			—
Extensions and discoveries	39,776			16,969			—
Previously estimated development costs incurred during the period	5,517			19,014			—
Revisions of previous quantity estimates, less related production costs	(9,143		)	(4,897		)	—
Accretion of discount	4,175			7,803			—
Net changes in income taxes	(12,137		)	(26,866		)	—
Change in production rates and other	2,862			(8,358		)	—
Total change in standardized measure of discounted future net cash flows	$	(8,339	)	$	558		$	—