Gulfport Energy Corporation Reports First Quarter 2020 Financial and Operating Results

Oklahoma City, Oklahoma, UNITED STATES


OKLAHOMA CITY, May 07, 2020 (GLOBE NEWSWIRE) -- Gulfport Energy Corporation (NASDAQ: GPOR) (“Gulfport” or the “Company”) today reported financial and operational results for the three-months ended March 31, 2020 and provided an update on its 2020 activities.  Key highlights are as follows:

  • Reduced total long-term debt by approximately $79.6 million as of March 31, 2020 when compared to December 31, 2019 primarily through discounted bond repurchases
  • Improved drilling efficiencies as measured by spud to total depth drilling days on a normalized basis in the Utica Shale and SCOOP by 11% and 32%, respectively, versus full year 2019 levels
  • Reported net loss of $517.5 million, or $3.24 per diluted share
  • Reported adjusted net income (non-GAAP) of $16.6 million, or $0.10 per diluted share
  • Generated adjusted EBITDA (non-GAAP) of $128.3 million
  • Reported cash provided by operating activities of $130.8 million
  • Generated operating cash flow (non-GAAP), excluding working capital changes, of $86.7 million
  • Improved 2020 and 2021 gas hedge portfolio with 495 BBtu per day of remaining 2020 natural gas production hedged at an average swap price of $2.88 per MMBtu and 250 BBtu per day of 2021 natural gas production hedged with costless collars at an average floor price of $2.46 per MMBtu and an average ceiling price of $2.81 per MMBtu
  • Completed semi-annual borrowing base redetermination and revolving credit facility redetermined at $700 million, providing adequate liquidity to fund our 2020 capital plan at current strip pricing

See the supplemental tables at the end of this press release for a reconciliation of non-GAAP measures including adjusted net income, EBITDA, adjusted EBITDA, and operating cash flow.

Chief Executive Officer and President, David M. Wood, commented, "During these unprecedented times, our focus is on the health and safety of our employees while continuing to execute on our 2020 capital budget we laid out in February. We remain committed to exercising capital discipline, maximizing cash flow generation, reducing costs and ensuring strong liquidity through the remainder of 2020."

Mr. Wood continued, "Our continued focus on increasing efficiencies and reducing costs led to solid progress during the first quarter of 2020. As planned, Gulfport's 2020 capital program is heavily weighted to the first half of 2020 and as a result, we are well positioned to generate positive free cash flow during the second half of the year."

Continued Debt Reduction
As of May 1, 2020, the Company had repurchased $73.3 million aggregate principal amount of unsecured senior notes for $22.8 million in cash during 2020. Since initiating the debt repurchase program in mid-2019, Gulfport had repurchased $263.4 million aggregate principal amount of unsecured senior notes for $161.6 million cash representing a total discount capture of $101.8 million and an annual cash interest reduction of approximately $11 million.

Balance Sheet and Liquidity
Gulfport completed its spring borrowing base redetermination effective May 1, 2020 and the borrowing base was redetermined at $700 million.  Pro forma for the revised borrowing base,
the Company’s liquidity at May 1, 2020 totaled approximately $269.0 million, comprised of the $700 million borrowing base plus approximately $3.8 million in cash on hand less $326.8 million outstanding letters of credit and $108.0 million of revolver draw as of May 1, 2020.

The revised $700 million borrowing base provides adequate liquidity to finance the Company’s projected 2020 capital plan.

Production and Realized Prices
Gulfport’s net daily production for the first quarter of 2020 averaged approximately 1,054 MMcfe per day. For the first quarter of 2020, Gulfport’s net daily production mix was comprised of approximately 90% natural gas, 7% natural gas liquids ("NGL") and 3% oil.

GULFPORT ENERGY CORPORATION
PRODUCTION SCHEDULE
(Unaudited)
 Three months ended
 March 31,
Production Volumes:2020 2019
    
Natural gas (MMcf)86,059  102,079 
Oil (MBbls)532  612 
NGL (MGal)46,518  55,830 
Gas equivalent (MMcfe)95,896  113,726 
Gas equivalent (Mcfe per day)1,053,799  1,263,617 
    
Average Realized Prices   
(after deducts for transportation costs and before the impact of derivatives):   
    
Natural gas (per Mcf)$1.26  $2.70 
Oil (per Bbl)$43.53  $53.10 
NGL (per Gal)$0.36  $0.58 
Gas equivalent (per Mcfe)$1.55  $3.00 
    
Average Realized Prices:   
(after deducts for transportation costs and including cash-settlement of derivatives):
    
Natural gas (per Mcf)$1.97  $2.45 
Oil (per Bbl)$61.39  $53.13 
NGL (per Gal)$0.37  $0.59 
Gas equivalent (per Mcfe)$2.29  $2.78 

The table below summarizes Gulfport’s first quarter of 2020 production by asset area:

GULFPORT ENERGY CORPORATION
PRODUCTION BY AREA
(Unaudited)
 Three months ended
 March 31,
 20202019
Utica Shale  
Natural gas (MMcf)71,505 85,700 
Oil (MBbls)54 66 
NGL (MGal)12,221 23,336 
Gas equivalent (MMcfe)73,575 89,428 
   
SCOOP  
Natural gas (MMcf)14,550 16,366 
Oil (MBbls)471 398 
NGL (MGal)34,297 32,480 
Gas equivalent (MMcfe)22,274 23,394 
   
Other  
Natural gas (MMcf)4 13 
Oil (MBbls)7 148 
NGL (MGal) 15 
Gas equivalent (MMcfe)47 904 

2020 Capital Expenditures
For the three-month period ended March 31, 2020, Gulfport’s incurred total capital expenditures were $135.3 million. Gulfport’s incurred total capital expenditures includes approximately $127.3 million of operated drilling and completion (“D&C”) capital expenditures, $3.4 million of non-operated D&C expenditures and $4.6 million of land capital expenditures. The Company's 2020 capital program is heavily weighted in first half of 2020 and the Company expects to generate positive cash flow during the second half of 2020.

Operational Update
For the three-month period ended March 31, 2020, key operational updates include:

  • Spud 7 gross and net operated wells in the Utica Shale and 5 gross (4.3 net) operated wells in the SCOOP and had 3 gross wells in various stages of drilling at the end of the first quarter of 2020
  • Completed 15 gross and net operated wells in the Utica Shale and 4 gross (3.8 net) operated wells in the SCOOP during the first quarter of 2020 and had 3 gross wells in various stages of completion at the end of the first quarter of 2020
  • Turned-to-sales 4 gross (3.8 net) operated wells in the SCOOP during the first quarter of 2020 and 3 gross and net operated wells in the Utica Shale after March 19, 2020

The table below summarizes Gulfport's activity for the three-month period ended March 31, 2020:

GULFPORT ENERGY CORPORATION
ACTIVITY SUMMARY
(Unaudited)
    
 Three months ended  
 March 31, Guidance
 2020 2020
Net Wells Spud   
Utica - Operated7.0 15
SCOOP - Operated4.3 8
Total11.3  
    
Net Wells Turned-to-Sales   
Utica - Operated3.0 18
SCOOP - Operated3.8 4
Total6.8  

Utica Shale
In the Utica Shale, during the first quarter of 2020, Gulfport spud 7 gross and net operated wells. The wells drilled during this period had an average lateral length of approximately 10,200 feet. Normalizing to an 8,000 foot lateral length, Gulfport's average drilling days from spud to rig release totaled approximately 17.7 days, an improvement of 11% from the 2019 average and the best average quarter to date the Company has experienced in the play. In addition, Gulfport turned-to-sales 3 gross (3.0 net) operated wells with an average stimulated lateral length of approximately 15,100 feet.

At present, Gulfport has one operated drilling rig running in the play and expects to continue with this level of activity through October 2020.

SCOOP
In the SCOOP, during the first quarter of 2020, Gulfport spud five gross (4.3 net) operated wells. The wells drilled during this period had an average lateral length of approximately 9,500 feet. Normalizing to a 7,500 foot lateral length, Gulfport's average drilling days from spud to rig release totaled approximately 37.4 days, an improvement of 32% from the 2019 average and similar to the Utica Shale, the best average quarter to date the Company has experienced since entering the play.  In addition, Gulfport turned-to-sales four gross (3.8 net) operated wells with an average stimulated lateral length of approximately 6,500 feet.

At present, Gulfport has one operated drilling rig running in the play and expects to continue with this level of activity for the remainder of 2020.

2020 Capital Budget and Production Guidance
Based on continued efficiencies, service cost deflation and actual results to date, Gulfport currently forecasts 2020 total capital expenditures to be at or below the low end of the previously provided range of $285 million to $310 million.

Because of the sharp decline in oil prices since early March 2020, as well as the current outlook for low oil prices throughout the second quarter of 2020, Gulfport plans to shut in a minimal amount production over the next few months, including a large number of vertical wells in the SCOOP. The Company expects these shut ins to impact its production by less than 20 MMcfe per day.  Gulfport also anticipates some of its non-operated production may be negatively impacted by voluntary shut-ins due to low prices.  In addition, the COVID-19 pandemic creates risks of delays in new drilling and completion activities that could negatively impact Gulfport, its  non-operated partners or its service providers.  Finally, Gulfport is actively exploring opportunities to potentially defer near-term production to later periods in 2020 or early 2021 when gas prices are materially higher in an effort to maximize returns and cash flow.  Considering all of these factors, Gulfport's previously provided production guidance for full year 2020 should no longer be relied upon.

Gulfport reaffirms its previously provided 2020 forecasted realizations and projected operating costs guidance.

Derivatives
Gulfport regularly hedges a portion of its expected production to lock in prices and returns that provide certainty of cash flow to execute on its capital plans. The table below details the Company's hedging positions as of May 7, 2020:

GULFPORT ENERGY CORPORATION
COMMODITY DERIVATIVES - HEDGE POSITION
(Unaudited)
        
        
 2Q2020 3Q2020 4Q2020  
Natural Gas:       
Swap Contracts (NYMEX)       
Volume (BBtupd)774  345  370   
Price ($ per MMBtu)$2.91  $2.91  $2.80   
        
Basis Swap Contracts (OGT)       
Volume (BBtupd)10  10  10   
Differential ($ per MMBtu)$(0.54) $(0.54) $(0.54)  
        
Basis Swap Contracts (Transco Zone 4)       
Volume (BBtupd)60  60  60   
Differential ($ per MMBtu)$(0.05) $(0.05) $(0.05)  
        
Oil:       
Swap Contracts (WTI)       
Volume (Bblpd)  2,000  2,000   
Price ($ per Bbl)$  $35.60  $35.60   
        
NGL:       
C3 Propane Swap Contracts       
Volume (Bblpd)500  500  500   
Price ($ per Gal)$0.52  $0.52  $0.52   
        
        
 2020(1) 2021 2022 2023
Natural Gas:       
Swap Contracts (NYMEX)       
Volume (BBtupd)495       
Price ($ per MMBtu)$2.88  $  $  $ 
        
Collars (NYMEX)       
Volume (BBtupd)  250     
Weighted Average Floor Purchase Price ($ per MMBtu)$  $2.46  $  $ 
Weighted Average Ceiling Sold Price ($ per MMBtu)$  $2.81  $  $ 
        
Call Option Contracts (NYMEX)       
Volume (BBtupd)    628  628 
Price ($ per MMBtu)$  $  $2.90  $2.90 
        
Basis Swap Contracts (OGT)       
Volume (BBtupd)10       
Differential ($ per MMBtu)$(0.54) $  $  $ 
        
Basis Swap Contracts (Transco Zone 4)       
Volume (BBtupd)60       
Differential ($ per MMBtu)$(0.05) $  $  $ 
        
Oil:       
Swap Contracts (WTI)       
Volume (Bblpd)1,338       
Price ($ per Bbl)$35.60  $  $  $ 
        
NGL:       
C3 Propane Swap Contracts       
Volume (Bblpd)500       
Price ($ per Gal)$0.52  $  $  $ 
        
(1) April 1 - December 31, 2020       

Presentation
An updated presentation has been posted to the Company’s website. The presentation can be found at www.gulfportenergy.com under the “Company Information” section on the “Investor Relations” page. Information on the Company’s website does not constitute a portion of this press release.

Conference Call
Gulfport will host its first quarter of 2020 earnings conference call on Friday, May 8, 2020 at 9:00 a.m. Central Time.

Interested parties may listen to the call via Gulfport’s website at www.gulfportenergy.com or by calling toll-free at 866-373-3408 or 412-902-1039 for international callers.  A replay of the call will be available for two weeks at 877-660-6853 or 201-612-7415 for international callers.  The replay passcode is 13695468.  The webcast will also be available for two weeks on the Company’s website and can be accessed on the Company’s “Investor Relations” page.

About Gulfport
Gulfport Energy is an independent natural gas and oil company focused on the exploration and development of natural gas and oil properties in North America and is one of the largest producers of natural gas in the contiguous United States. Headquartered in Oklahoma City, Gulfport holds significant acreage positions in the Utica Shale of Eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. In addition, Gulfport holds non-core assets that include an approximately 22% equity interest in Mammoth Energy Services, Inc. (NASDAQ: TUSK) and has a position in the Alberta Oil Sands in Canada through its 25% interest in Grizzly Oil Sands ULC. For more information, please visit www.gulfportenergy.com.

Forward Looking Statements
This press release includes “forward-looking statements” for purposes of the safe harbor provisions of the Private Securities Litigation Reform Act of 1995, Section 27A of the Securities Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934. All statements, other than statements of historical facts, included in this press release that address activities, events or developments that Gulfport expects or anticipates will or may occur in the future, including such things as the expected impact of the COVID-19 pandemic on our business, our industry and the global economy, production and financial guidance, future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, repurchases of our outstanding debt, the timing and completion of asset sales, competitive strength, goals, expansion and growth of Gulfport’s business and operations, plans, market conditions, 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 Gulfport in light of its experience and its perception of historical trends, current conditions and expected future developments as well as other factors it believes are appropriate in the circumstances. However, whether actual results and developments will conform with Gulfport’s expectations and predictions is subject to a number of risks and uncertainties, general economic, market, credit or business conditions that might affect the timing and amount of the repurchase program; the opportunities (or lack thereof) that may be presented to and pursued by Gulfport; Gulfport’s ability to identify, complete and integrate acquisitions of properties and businesses; Gulfport’s ability to achieve the anticipated benefits of its strategic initiatives; competitive actions by other oil and gas companies; changes in laws or regulations; and other factors, many of which are beyond the control of Gulfport. Information concerning these and other factors can be found in the Company’s filings with the Securities and Exchange Commission ("SEC"), including its Forms 10-K, 10-Q and 8-K. Consequently, all of the forward-looking statements made in this press release are qualified by these cautionary statements and there can be no assurances that the actual results or developments anticipated by Gulfport will be realized, or even if realized, that they will have the expected consequences to or effects on Gulfport, its business or operations. Gulfport has no intention, and disclaims any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.

Investors should note that Gulfport announces financial information in SEC filings, press releases and public conference calls.  Gulfport may use the Investors section of its website (www.gulfportenergy.com) to communicate with investors.  It is possible that the financial and other information posted there could be deemed to be material information.  The information on Gulfport’s website is not part of this filing.

Investor Contact:
Jessica Antle – Director, Investor Relations
jantle@gulfportenergy.com
405-252-4550

Media Contact
Reevemark
Paul Caminiti / Hugh Burns / Nicholas Leasure
212-433-4600

GULFPORT ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS

 March 31, 2020 December 31, 2019
 (Unaudited)  
 (In thousands, except share data)
Assets   
Current assets:   
Cash and cash equivalents$1,633  $6,060 
Accounts receivable—oil and natural gas sales74,099  121,210 
Accounts receivable—joint interest and other42,547  47,975 
Prepaid expenses and other current assets11,848  4,431 
Short-term derivative instruments171,755  126,201 
Total current assets301,882  305,877 
Property and equipment:   
Oil and natural gas properties, full-cost accounting, $1,608,640 and $1,686,666 excluded from amortization in 2020 and 2019, respectively10,667,532  10,595,735 
Other property and equipment96,882  96,719 
Accumulated depletion, depreciation, amortization and impairment(7,859,873) (7,228,660)
Property and equipment, net2,904,541  3,463,794 
Other assets:   
Equity investments6,225  32,044 
Long-term derivative instruments  563 
Deferred tax asset  7,563 
Operating lease assets10,186  14,168 
Operating lease assets—related parties  43,270 
Other assets41,453  15,540 
Total other assets57,864  113,148 
Total assets$3,264,287  $3,882,819 
Liabilities and Stockholders’ Equity   
Current liabilities:   
Accounts payable and accrued liabilities$437,453  $415,218 
Short-term derivative instruments67  303 
Current portion of operating lease liabilities9,873  13,826 
Current portion of operating lease liabilities—related parties  21,220 
Current maturities of long-term debt688  631 
Total current liabilities448,081  451,198 
Long-term derivative instruments70,829  53,135 
Asset retirement obligation59,444  60,355 
Uncertain tax position liability3,209  3,127 
Non-current operating lease liabilities313  342 
Non-current operating lease liabilities—related parties  22,050 
Long-term debt, net of current maturities1,898,362  1,978,020 
Total liabilities2,480,238  2,568,227 
Commitments and contingencies   
Preferred stock, $0.01 par value; 5,000,000 shares authorized (30,000 authorized as redeemable 12% cumulative preferred stock, Series A), and none issued and outstanding   
Stockholders’ equity:   
Common stock - $.01 par value, 200,000,000 shares authorized, 159,841,930 issued and outstanding at March 31, 2020 and 159,710,955 at December 31, 20191,598  1,597 
Paid-in capital4,209,578  4,207,554 
Accumulated other comprehensive loss(61,863) (46,833)
Accumulated deficit(3,365,264) (2,847,726)
Total stockholders’ equity784,049  1,314,592 
Total liabilities and stockholders’ equity$3,264,287  $3,882,819 

GULFPORT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(Unaudited)

 Three months ended March 31,
 2020 2019
    
 (In thousands, except share data)
Revenues:   
Natural gas sales$108,547  $276,016 
Oil and condensate sales23,151  32,482 
Natural gas liquid sales16,913  32,125 
Net gain (loss) on natural gas, oil and NGL derivatives98,266  (20,045)
 246,877  320,578 
Costs and expenses:   
Lease operating expenses15,986  19,807 
Production taxes4,799  7,921 
Midstream gathering and processing expenses57,896  70,282 
Depreciation, depletion and amortization78,028  118,433 
Impairment of oil and natural gas properties553,345   
General and administrative expenses16,169  10,057 
Accretion expense741  1,067 
 726,964  227,567 
(LOSS) INCOME FROM OPERATIONS(480,087) 93,011 
OTHER EXPENSE (INCOME):   
Interest expense32,990  35,621 
Interest income(152) (152)
Gain on debt extinguishment(15,322)  
Loss (income) from equity method investments, net10,789  (4,273)
Other expense (income)1,856  (427)
 30,161  30,769 
(LOSS) INCOME BEFORE INCOME TAXES(510,248) 62,242 
INCOME TAX EXPENSE7,290   
NET (LOSS) INCOME$(517,538) $62,242 
NET (LOSS) INCOME PER COMMON SHARE:   
Basic$(3.24) $0.38 
Diluted$(3.24) $0.38 
Weighted average common shares outstanding—Basic159,760,222  162,823,997 
Weighted average common shares outstanding—Diluted159,760,222  163,099,409 

GULFPORT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(Unaudited)

 Three months ended March 31,
 2020 2019
    
 (In thousands)
Cash flows from operating activities:   
Net (loss) income$(517,538) $62,242 
Adjustments to reconcile net (loss) income to net cash provided by operating activities:   
Depletion, depreciation and amortization78,028  118,433 
Impairment of oil and natural gas properties553,345   
Loss (income) from equity investments10,789  (4,132)
Gain on debt extinguishment(15,322)  
Net (gain) loss on derivative instruments(98,266) 20,045 
Cash receipts (payments) on settled derivative instruments70,733  (24,836)
Deferred income tax expense7,290   
Other, net3,223  5,508 
Changes in operating assets and liabilities:   
Decrease in accounts receivable—oil and natural gas sales47,111  65,204 
Decrease (increase) in accounts receivable—joint interest and other6,001  (2,083)
(Decrease) increase in accounts payable and accrued liabilities(7,637) 1,366 
Other, net(6,919) (1,982)
Net cash provided by operating activities130,838  239,765 
Cash flows from investing activities:   
Additions to oil and natural gas properties(113,744) (241,391)
Proceeds from sale of oil and natural gas properties44,383  52 
Additions to other property and equipment(539) (3,848)
Proceeds from sale of other property and equipment91  56 
Contributions to equity method investments  (432)
Net cash used in investing activities(69,809) (245,563)
Cash flows from financing activities:   
Principal payments on borrowings(180,106) (150,151)
Borrowings on line of credit125,000  150,000 
Repurchases of senior notes(10,204)  
Payments for repurchases of stock under approved stock repurchase program  (28,212)
Other, net(146) (140)
Net cash used in financing activities(65,456) (28,503)
Net decrease in cash, cash equivalents and restricted cash(4,427) (34,301)
Cash, cash equivalents and restricted cash at beginning of period6,060  52,297 
Cash, cash equivalents and restricted cash at end of period$1,633  $17,996 
Supplemental disclosure of cash flow information:   
Interest payments$14,034  $15,266 
Income tax receipts$  $(1,794)
Supplemental disclosure of non-cash transactions:   
Capitalized stock-based compensation$934  $1,114 
Asset retirement obligation capitalized$381  $1,952 
Asset retirement obligation removed due to divestiture$(2,033) $ 
Interest capitalized$187  $766 
Fair value of contingent consideration asset on date of divestiture$23,090  $ 
Foreign currency translation (loss) gain on equity method investments$(15,030) $3,801 

Explanation and Reconciliation of Non-GAAP Financial Measures
EBITDA is a non-GAAP financial measure equal to net (loss) income, the most directly comparable GAAP financial measure, plus interest expense, income tax (benefit) expense, accretion expense, depreciation, depletion and amortization and impairment of oil and gas properties. Adjusted EBITDA is a non-GAAP financial measure equal to EBITDA less non-cash derivative loss (gain), rig terminations fees, gain on debt extinguishment, non-recurring general and administrative expenses and (income) loss from equity method investments. Cash flow from operating activities before changes in operating assets and liabilities is a non-GAAP financial measure equal to cash provided by operating activity before changes in operating assets and liabilities and inclusive of capitalized expenses incurred during the given period. Free cash flow is a non-GAAP measure defined as cash flow from operating activities before changes in operating assets and liabilities (as defined above) less capital expenditures incurred. Adjusted net income is a non-GAAP financial measure equal to pre-tax net (loss) income less non-cash derivative loss (gain), impairment of oil and gas properties, rig terminations fees, gain on debt extinguishment, non-recurring general and administrative expenses and (income) loss from equity method investments. The Company has presented EBITDA, adjusted EBITDA, adjusted net income, cash flow from operating activities before changes in operating assets and liabilities and free cash flow because it uses these measures as an integral part of its internal reporting to evaluate its performance and the performance of its senior management. These measures are considered important indicators of the operational strength of the Company’s business and eliminate the uneven effect of considerable amounts of non-cash depletion, depreciation of tangible assets and amortization of certain intangible assets. A limitation of these measures, however, is that they do not reflect the periodic costs of certain capitalized tangible and intangible assets used in generating revenues in the Company’s business. Management evaluates the costs of such tangible and intangible assets and the impact of related impairments through other financial measures, such as capital expenditures, investment spending and return on capital. Therefore, the Company believes that these measures provide useful information to its investors regarding its performance and overall results of operations. EBITDA, adjusted EBITDA, adjusted net income, cash flow from operating activities before changes in operating assets and liabilities and free cash flow are not intended to be performance measures that should be regarded as an alternative to, or more meaningful than, either net income as an indicator of operating performance or to cash flows from operating activities as a measure of liquidity. In addition, EBITDA, adjusted EBITDA, adjusted net income and cash flow from operating activities before changes in operating assets and liabilities are not intended to represent funds available for reinvestment or other discretionary uses, and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with GAAP. The EBITDA, adjusted EBITDA, adjusted net income, cash flow from operating activities before changes in operating assets and liabilities and free cash flow presented in this press release may not be comparable to similarly titled measures presented by other companies, and may not be identical to corresponding measures used in the Company’s various agreements.

GULFPORT ENERGY CORPORATION
RECONCILIATION OF EBITDA
(Unaudited)
    
 Three months ended March 31,
 2020 2019
    
  (In thousands)
    
Net (loss) income$(517,538) $62,242 
Interest expense32,990  35,621 
Income tax expense7,290   
Accretion expense741  1,067 
Depreciation, depletion and amortization78,028  118,433 
Impairment of oil and gas properties553,345   
EBITDA$154,856  $217,363 


GULFPORT ENERGY CORPORATION
RECONCILIATION OF ADJUSTED EBITDA
(Unaudited)
    
 Three months ended March 31,
 2020 2019
    
  (In thousands)
    
EBITDA$154,856  $217,363 
    
Adjustments:   
Non-cash derivative gain(28,914) (4,791)
Non-cash derivative loss on contingent payments1,381   
Rig termination fees1,649   
Gain on debt extinguishment(15,322)  
Non-recurring general and administrative expenses3,905  538 
Loss (income) from equity method investments10,789  (4,273)
    
    
Adjusted EBITDA$128,344  $208,837 
    


GULFPORT ENERGY CORPORATION
RECONCILIATION OF CASH FLOW
(Unaudited)
    
 Three months ended March 31,
 2020 2019
    
  (In thousands)
    
Cash provided by operating activity$130,838  $239,765 
Adjustments:   
Changes in operating assets and liabilities(38,556) (62,505)
Capitalized expenses incurred(1)(5,618) (8,461)
Operating cash flow$86,664  $168,799 
Capital expenditures incurred(2)(135,305) (274,946)
Free cash flow$(48,641) $(106,147)
    
(1) Includes capitalized general and administrative expense incurred and capitalized interest expenses incurred
(2) Incurred capital expenditures and cash capital expenditures may vary from period to period due to the cash payment cycle


GULFPORT ENERGY CORPORATION
RECONCILIATION OF ADJUSTED NET INCOME
(Unaudited)
    
 Three months ended March 31,
 2020 2019
    
  (In thousands, except share data)
    
(Loss) income before income taxes$(510,248) $62,242 
Adjustments:   
Non-cash derivative gain(28,914) (4,791)
Non-cash derivative loss on contingent payments1,381   
Impairment of oil and gas properties553,345   
Rig termination fees1,649   
Gain on debt extinguishment(15,322)  
Non-recurring general and administrative expenses3,905  538 
Loss (income) from equity method investments10,789  (4,273)
Pre-tax net income excluding adjustments$16,585  $53,716 
    
Adjusted net income$16,585  $53,716 
    
Adjusted net income per common share:   
Basic$0.10  $0.33 
Diluted$0.10  $0.33 
    
Basic weighted average shares outstanding159,760,222  162,823,997 
Diluted weighted average shares outstanding161,312,645  163,099,409