Company: GPOR
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001628280-25-008043
Chunk: 348

Company: GULFPORT ENERGY CORP
Filing Date: 2025-02-26
Form: 10-K
Item: Item 7A
Chunk 348
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 significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities within the levels of the fair value hierarchy. Reclassifications of fair value between Level 1, Level 2 and Level 3 of the fair value hierarchy, if applicable, are made at the end of each quarter.

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Table of ContentsIndex to Financial Statements

Financial assets and liabilitiesThe following tables summarize the Company’s financial and non-financial assets and liabilities by valuation level as of December 31, 2024 and December 31, 2023 (in thousands):December 31, 2024Level 1Level 2Level 3Assets:Derivative instruments$— $64,088 $— Contingent consideration arrangement$— $— $2,700 Total assets$— $64,088 $2,700 Liabilities:Derivative instruments$— $76,970 $— December 31, 2023Level 1Level 2Level 3Assets:Derivative instruments$— $280,792 $— Contingent consideration arrangement$— $— $2,900 Total assets$— $280,792 $2,900 Liabilities:Derivative instruments$— $40,565 $— The Company estimates the fair value of all derivative instruments using industry-standard models that consider various assumptions including current market and contractual prices for the underlying instruments, implied volatility, time value, nonperformance risk, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument and can be supported by observable data. The Company's SCOOP water infrastructure sale, which closed in the first quarter of 2020, included a contingent consideration arrangement. As of December 31, 2024, the fair value of the contingent consideration was $2.7 million, of which $0.5 million is included in prepaid expenses and other current assets and $2.2 million is included in other assets in the accompanying consolidated balance sheets. The fair value of the contingent consideration arrangement is calculated using discounted cash flow techniques and is based on internal estimates of the Company's future development program and water production levels. Given the unobservable nature of the inputs, the fair value measurement of the contingent consideration arrangement is deemed to use Level 3 inputs. The Company has elected the fair value option for this contingent consideration