United States securities and exchange commission logo
December 16, 2022
William J. Buese
Chief Financial Officer
Gulfport Energy Corporation
713 Market Drive
Oklahoma City, Oklahoma 73114
Re: Gulfport Energy
Corporation
Form 10-K for
Fiscal Year Ended December 31, 2021
Form 8-K filed
November 1, 2022
File No. 001-19514
Dear William J. Buese:
We have limited our review of your filing to the financial
statements and related
disclosures and have the following comments. In some of our comments, we
may ask you to
provide us with information so we may better understand your disclosure.
Please respond to these comments within ten business days by
providing the requested
information or advise us as soon as possible when you will respond. If
you do not believe our
comments apply to your facts and circumstances, please tell us why in
your response.
After reviewing your
response to these comments, we may have additional comments.
Form 10-K for Fiscal Year Ended December 31, 2021
Definitions, page ii
1. We note disclosure of
reserves and production throughout your filing in terms of gas
equivalent amounts.
However, you do not appear to have clarified the basis for converting
liquid hydrocarbons to
gas equivalent amounts. Please expand your definitions as
necessary to comply
with Instruction 3 to paragraph (a)(2) of Item 1202 of Regulation S-
K.
Business
Oil, Natural Gas and NGL Reserves
Reserves Estimation, page 8
2. It appears that you
disclose material additions to your proved reserves for the year ended
December 31, 2021.
Please expand your disclosure to provide a general discussion of the
technologies used to
establish the appropriate level of certainty for your reserves
William J. Buese
FirstName LastNameWilliam
Gulfport Energy Corporation J. Buese
Comapany16,
December NameGulfport
2022 Energy Corporation
December
Page 2 16, 2022 Page 2
FirstName LastName
estimates. Refer to Item 1202(a)(6) of Regulation S-K.
Production, Prices and Production Costs, page 12
3. Please revise the information presented on pages 12 and 13 as Non-GAAP
Combined as
this characterization does not appear to be appropriate.
Management's Discussion and Analysis of Financial Condition and Results of
Operations, page
39
4. It appears that you have presented 2021 results and other information
as the mathematical
addition of the predecessor (January 1, 2021 to May 17, 2021) and
successor periods
(May 18, 2021 to December 31, 2021). We also note that you recognize
this combined
presentation does not comply with GAAP and has not been prepared as
pro forma results
under applicable regulations.
This type of presentation does not appear to be appropriate for
periods when fresh start
accounting was applied and the characterization of this information as
non-GAAP does
not appear to be consistent with Item 10(e) of Regulation S-K. Please
tell us why this
presentation is appropriate or remove it and revise the narrative
discussion of your
operating results.
Business and Industry Outlook, page 41
5. You state that you have experienced and expect to continue to
experience inflationary
pressures during 2022 and that you will continue to monitor and manage
inflationary
pressures caused by increased activities in the field as well as
supply chain pressures.
Revise to more clearly discuss whether supply chain disruptions
materially affect your
outlook or business goals and how these challenges have impacted your
results of
operations or capital resources and quantify, to the extent possible,
how your sales, profits,
and/or liquidity have been impacted. In addition, identify actions
planned or taken, if any,
to mitigate inflationary pressures and clarify the resulting impact to
the company, as
applicable.
Notes to Consolidated Financial Statements
20. Supplemental Information on Oil and Gas Exploration and Production
Activities (Unaudited)
Oil and Natural Gas Reserves, page 106
6. Please expand the tabular presentation of proved developed and proved
undeveloped
reserves, by individual product type, to additionally provide the net
quantities at the
beginning of the initial year shown in the reconciliation, i.e.
January 1, 2019. Refer to
FASB ASC 932-235-50-4.
William J. Buese
FirstName LastNameWilliam
Gulfport Energy Corporation J. Buese
Comapany16,
December NameGulfport
2022 Energy Corporation
December
Page 3 16, 2022 Page 3
FirstName LastName
Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil
and Gas
Reserves, page 108
7. Please expand the discussion accompanying the presentation of the
standardized measure
to clarify, if true, that all estimated future costs to settle your
asset retirement obligations
have been included in your calculation of the standardized measure for
each period
presented. Refer to FASB ASC 932-235-50-36.
If the estimated future costs to settle your asset retirement
obligations (including the costs
related to your proved undeveloped reserves) have not been included,
please explain to us
your rationale for excluding these costs from your calculation of the
standardized
measure, or revise your disclosure to include these costs.
Form 8-K filed November 1, 2022
Exhibit 99.2
Non-GAAP Reconciliations, page 14
8. Please provide us with an explanation for presenting Non-GAAP Combined
measures for
the predecessor and successor periods identified in your Form 8-K.
9. Expand your disclosure regarding forward-looking non-GAAP measures
where you are
relying on the exception per Item 10(e)(1)(i)(B) of Regulation S-K to
clearly disclose
your reliance on the exception and to identify the information that is
unavailable and its
probable significance in a location of equal or greater prominence.
See Question
102.10(b) of the Compliance & Disclosure Interpretations regarding
Non-GAAP Financial
Measures.
10. We note that a number of your non-GAAP measures include an adjustment
for Non-
recurring general and administrative expenses. Please revise to more
clearly explain the
nature of the amounts underlying these adjustments.
11. Please revise the adjustments to your non-GAAP measures titled "Other,
net" to provide a
qualitative and quantitative description of each of the components of
these adjustments.
12. We note you present Basic and Diluted EPS on Adjusted Net Income.
Please reconcile
these measures to GAAP Net Income (Loss) Per Share. Refer to Item
10(e)(1)(i)(B) of
Regulation S-K and Question 102.05 of the Compliance & Disclosure
Interpretations on
Non-GAAP Financial Measures.
13. It appears that the non-GAAP measure Free Cash Flow should be renamed
as you do not
calculate it in the typical manner. For additional information, see
Question 102.07 of the
Compliance & Disclosure Interpretations regarding Non-GAAP Financial
Measures.
14. Revise your reconciliation from Net Cash Provided by Operating
Activities to Adjusted
EBITDA to clarify the nature of the adjustment for Changes in
operating assets and
liabilities, net.
William J. Buese
Gulfport Energy Corporation
December 16, 2022
Page 4
15. Please clarify how the non-GAAP measure Recurring General and
Administrative
Expenses provides useful information to investors regarding your
financial condition and
results of operations. Refer to Item 10(e)(1)(i)(C) of Regulation S-K.
In closing, we remind you that the company and its management are
responsible for the
accuracy and adequacy of their disclosures, notwithstanding any review,
comments, action or
absence of action by the staff.
You may contact Jennifer O'Brien, Staff Accountant, at 202-551-3721 or
Ethan
Horowitz, Accounting Branch Chief, at 202-551-3311 if you have questions
regarding comments
on the financial statements and related matters. Please contact John Hodgin,
Petroleum Engineer,
at 202-551-3699 if you have questions regarding the engineering comments.
FirstName LastNameWilliam J. Buese Sincerely,
Comapany NameGulfport Energy Corporation
Division of
Corporation Finance
December 16, 2022 Page 4 Office of Energy &
Transportation
FirstName LastName