Company: GPOR
Filing Date: 2025-02-26
Form Type: 10-K
Source: 0001628280-25-008043
Chunk: 457

Company: GULFPORT ENERGY CORP
Filing Date: 2025-02-26
Form: 10-K
Item: Item 8
Chunk 457
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Table of ContentsIndex to Financial Statements

3.PROPERTY AND EQUIPMENT

The major categories of property and equipment and related accumulated DD&A are as follows (in thousands):December 31, 2024December 31, 2023Proved oil and natural gas properties$3,349,805 $2,904,519 Unproved properties221,650 204,233 Other depreciable property and equipment10,905 8,779 Land386 386 Total property and equipment3,582,746 3,117,917 Accumulated DD&A and impairment(1,564,475)(865,618)Property and equipment, net$2,018,271 $2,252,299 Oil and Natural Gas PropertiesUnder the full cost method of accounting, the Company is required to perform a ceiling test each quarter. The test determines a limit, or ceiling, on the book value of the Company's oil and natural gas properties. During the year ended December 31, 2024, the net book value of the Company's oil and gas properties exceeded the calculated ceiling. As a result, the Company recorded a non-cash ceiling test impairment of its oil and natural gas properties of $30.5 million in the third quarter of 2024 and $342.7 million in the fourth quarter of 2024. The impairments resulted from declines in the full cost ceiling, which primarily resulted from the significant decrease in the 12-month average trailing price for natural gas. The Company did not record an impairment of its oil and natural gas properties during 2023 or 2022. Lower natural gas, oil and NGL prices can reduce the value of the Company’s assets. In addition to commodity prices, our production rates, levels of proved reserves, future development costs, transfers of unevaluated properties and other factors will determine the actual ceiling test calculation and impairment analysis in future periods. Given the decline of natural gas prices through December 2024, we may have additional ceiling test impairments of our oil and natural gas properties in subsequent quarters if the 12-month average trailing price does not improve from the $2.13 per MMBtu utilized in the fourth quarter 2024 ceiling test. Any such ceiling test impairment could be material to our net earnings; however, given the inter-relationship of the various judgements made to estimate proved reserves, it is impractical to estimate the potential changes in these estimates and their impact on the