Company: GPOR
Filing Date: 2025-08-06
Form Type: 10-Q
Source: 0001628280-25-038172
Chunk: 76

Company: GULFPORT ENERGY CORP
Filing Date: 2025-08-06
Form: 10-Q
Item: Part I, Item 1
Chunk 76
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2025, the fair value of the contingent consideration was $2.1 million, of which $0.1 million is included in prepaid expenses and other assets and $2.0 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 records changes in fair value in earnings. The fair value of the contingent consideration arrangement decreased $0.4 million and $0.5 million for the three and six months ended June 30, 2025. The Company did not recognize a gain or loss for the three and six months ended June 30, 2024 with respect to this contingent consideration arrangement. These fair value changes are included in Other, net in the accompanying consolidated statements of operations.Non-financial assets and liabilitiesThe initial measurement of asset retirement obligations at fair value is calculated using discounted cash flow techniques and based on internal estimates of future retirement costs associated with oil and gas properties. Given the unobservable nature of the inputs, including plugging costs and reserve lives, the initial measurement of the asset retirement obligation liability is deemed to use Level 3 inputs. See Note 3 for further discussion of the Company’s asset retirement obligations.Fair value of other financial instruments

The carrying amounts on the accompanying consolidated balance sheet for cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities are carried at cost, which approximates market value due to their short-term nature. Long-term debt related to the Company's Credit Facility is carried at cost, which approximates market value based on the borrowing rates currently available to the Company with similar terms and maturities. 

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12.REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue RecognitionThe Company’s revenues are primarily derived from the sale of natural gas, oil, condensate and NGL. These sales are recognized in the period that the performance obligations are satisfied. The Company generally considers the delivery of each unit (MMBtu or Bbl) to be separately identifiable and represents a distinct performance obligation that is satisfied at the time control of the product is transferred to the customer. Revenue is measured based on consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third parties. These contracts typically include variable consideration that