Company: GPOR
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001628280-25-038172
Chunk: 106

Company: GULFPORT ENERGY CORP
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 1
Chunk 106
---
 differential to the counterparty for the hedged commodity.

•Costless Collars: Each two-way price collar has a set floor and ceiling price for the hedged production. If the applicable monthly price indices are outside of the ranges set by the floor and ceiling prices in the various collars, the Company will cash-settle the difference with the counterparty.

49

•Call Options: We sell, and occasionally buy, call options in exchange for a premium. At the time of settlement, if the market price exceeds the fixed price of the call option, we pay the counterparty the excess on sold call options, and we would receive the excess on bought call options. If the market price settles below the fixed price of the call option, no payment is due from either party.

Our hedge arrangements may expose us to risk of financial loss in certain circumstances, including instances where production is less than expected or commodity prices increase. At June 30, 2025, we had a net liability derivative position of $32.9 million as compared to a net liability derivative position of $12.9 million as of December 31, 2024. Utilizing actual derivative contractual volumes, a 10% increase in underlying commodity prices would have increased our liability by approximately $99.3 million, while a 10% decrease in underlying commodity prices would have decreased our liability by approximately $98.8 million. However, any realized derivative gain or loss would be substantially offset by a decrease or increase, respectively, in the actual sales value of production covered by the derivative instrument. 

Interest Rate Risk. Our Credit Facility is structured under floating rate terms, as advances under these facilities may be in the form of either base rate loans or term benchmark loans. As such, our interest expense is sensitive to fluctuations in the prime rates in the United States, or, if the term benchmark rates are elected, the term benchmark rates. At June 30, 2025, we had $55.0 million outstanding borrowings under our Credit Facility which bore interest at a weighted average rate of 6.77% for the six months ended June 30, 2025. As of June 30, 2025, we did not have any interest rate swaps to hedge interest rate risks.

ITEM 4.CONTROLS AND PROCEDURES

Evaluation of Disclosure Control and Procedures. Under the supervision of our Chief Executive Officer and our Chief Financial Officer, and with participation of management, we have established disclosure controls and procedures that are designed to ensure that information