10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

(Mark One)

ý	QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
	For the quarterly period ended September 30, 2018 OR

¨	TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934
	For the transition period from                      to

Commission File Number 000-19514

Gulfport Energy Corporation

(Exact Name of Registrant As Specified in Its Charter)

Delaware	73-1521290
(State or Other Jurisdiction of Incorporation or Organization)	(IRS Employer Identification Number)
3001 Quail Springs Parkway Oklahoma City, Oklahoma	73134
(Address of Principal Executive Offices)	(Zip Code)

(405) 252-4600

(Registrant Telephone Number, Including Area Code)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes  ý    No  ¨

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).    Yes  ý    No  ¨

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):

Large Accelerated filer  ý    Accelerated filer   ¨    Non-accelerated filer  ¨    Smaller reporting company  ¨

Emerging growth company  ¨

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes  ¨    No  ý

As of October 29, 2018, 173,302,055 shares of the registrant’s common stock were outstanding.

GULFPORT ENERGY CORPORATION

TABLE OF CONTENTS

		Page
PART I FINANCIAL INFORMATION
Item 1.	Consolidated Financial Statements (Unaudited):	2
	Consolidated Balance Sheets at September 30, 2018 and December 31, 2017	2
	Consolidated Statements of Operations for the Three and Nine Months Ended September 30, 2018 and 2017	3
	Consolidated Statements of Comprehensive Income for the Three and Nine Months Ended September 30, 2018 and 2017	4
	Consolidated Statements of Stockholders’ Equity for the Nine Months Ended September 30, 2018 and 2017	5
	Consolidated Statements of Cash Flows for the Nine Months Ended September 30, 2018 and 2017	6
	Notes to Consolidated Financial Statements	7
Item 2.	Management’s Discussion and Analysis of Financial Conditions and Results of Operations	38
Item 3.	Quantitative and Qualitative Disclosures About Market Risk	56
Item 4.	Controls and Procedures	57
PART II OTHER INFORMATION
Item 1.	Legal Proceedings	59
Item 1A.	Risk Factors	59
Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	59
Item 3.	Defaults Upon Senior Securities	60
Item 4.	Mine Safety Disclosures	60
Item 5.	Other Information	60
Item 6.	Exhibits	61
Signatures		63

1

GULFPORT ENERGY CORPORATION

CONSOLIDATED BALANCE SHEETS

(Unaudited)

	September 30, 2018			December 31, 2017
	(In thousands, except share data)
Assets
Current assets:
Cash and cash equivalents	$	124,571		$	99,557
Accounts receivable—oil and natural gas sales	157,391			146,773
Accounts receivable—joint interest and other	39,511			35,440
Accounts receivable—related parties	79			—
Prepaid expenses and other current assets	9,742			4,912
Short-term derivative instruments	19,809			78,847
Total current assets	351,103			365,529
Property and equipment:
Oil and natural gas properties, full-cost accounting, $2,925,145 and $2,912,974 excluded from amortization in 2018 and 2017, respectively	9,936,714			9,169,156
Other property and equipment	92,388			86,754
Accumulated depletion, depreciation, amortization and impairment	(4,506,306		)	(4,153,733		)
Property and equipment, net	5,522,796			5,102,177
Other assets:
Equity investments	232,529			302,112
Long-term derivative instruments	3,530			8,685
Deferred tax asset	—			1,208
Inventories	8,234			8,227
Other assets	17,038			19,814
Total other assets	261,331			340,046
Total assets	$	6,135,230		$	5,807,752
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	582,464		$	553,609
Asset retirement obligation—current	120			120
Short-term derivative instruments	62,601			32,534
Current maturities of long-term debt	647			622
Total current liabilities	645,832			586,885
Long-term derivative instruments	15,101			2,989
Asset retirement obligation—long-term	78,411			74,980
Deferred tax liability	3,046			—
Other non-current liabilities	—			2,963
Long-term debt, net of current maturities	2,100,825			2,038,321
Total liabilities	2,843,215			2,706,138
Commitments and contingencies (Note 9)
Preferred stock, $.01 par value; 5,000,000 authorized, 30,000 authorized as redeemable 12% cumulative preferred stock, Series A; 0 issued and outstanding	—			—
Stockholders’ equity:
Common stock - $.01 par value, 200,000,000 authorized, 173,218,643 issued and outstanding at September 30, 2018 and 183,105,910 at December 31, 2017	1,732			1,831
Paid-in capital	4,316,006			4,416,250
Accumulated other comprehensive loss	(46,354		)	(40,539		)
Retained deficit	(979,369		)	(1,275,928		)
Total stockholders’ equity	3,292,015			3,101,614
Total liabilities and stockholders’ equity	$	6,135,230		$	5,807,752

See accompanying notes to consolidated financial statements.

2

GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF OPERATIONS

(Unaudited)

	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
	(In thousands, except share data)
Revenues:
Natural gas sales	$	271,167		$	223,340		$	753,261		$	606,544
Oil and condensate sales	45,682			31,459			140,687			85,338
Natural gas liquid sales	53,776			33,559			141,883			88,985
Net (loss) gain on natural gas, oil, and NGL derivatives	(9,663		)	(22,860		)	(96,737		)	141,588
	360,962			265,498			939,094			922,455
Costs and expenses:
Lease operating expenses	22,325			20,020			64,143			60,044
Production taxes	9,348			5,419			23,861			14,464
Midstream gathering and processing	78,913			69,372			214,546			176,258
Depreciation, depletion and amortization	119,915			106,650			352,848			254,887
General and administrative	15,848			13,065			42,955			37,922
Accretion expense	1,037			456			3,056			1,148
Acquisition expense	—			33			—			2,391
	247,386			215,015			701,409			547,114
INCOME FROM OPERATIONS	113,576			50,483			237,685			375,341
OTHER (INCOME) EXPENSE:
Interest expense	33,253			27,130			100,922			74,797
Interest income	(92		)	(37		)	(162		)	(927		)
Litigation settlement	917			—			917			—
Insurance proceeds	—			—			(231		)	—
Gain on sale of equity method investments	(2,733		)	—			(124,768		)	(12,523		)
(Income) loss from equity method investments, net	(12,858		)	2,737			(35,282		)	33,468
Other income	(61		)	(345		)	(201		)	(863		)
	18,426			29,485			(58,805		)	93,952
INCOME BEFORE INCOME TAXES	95,150			20,998			296,490			281,389
INCOME TAX EXPENSE (BENEFIT)	—			2,763			(69		)	2,763
NET INCOME	$	95,150		$	18,235		$	296,559		$	278,626
NET INCOME PER COMMON SHARE:
Basic	$	0.55		$	0.10		$	1.69		$	1.56
Diluted	$	0.55		$	0.10		$	1.68		$	1.56
Weighted average common shares outstanding—Basic	173,057,538			182,957,416			175,776,312			178,736,569
Weighted average common shares outstanding—Diluted	173,304,914			183,008,436			176,440,461			179,130,570

See accompanying notes to consolidated financial statements.

3

GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME

(Unaudited)

	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018			2017
	(In thousands)
Net income	$	95,150	$	18,235	$	296,559		$	278,626
Foreign currency translation adjustment	3,052		6,832		(5,815		)	12,719
Other comprehensive income (loss)	3,052		6,832		(5,815		)	12,719
Comprehensive income	$	98,202	$	25,067	$	290,744		$	291,345

See accompanying notes to consolidated financial statements.

4

GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY

(Unaudited)

						Paid-in Capital			Accumulated Other Comprehensive (Loss) Income			Retained Deficit			Total Stockholders’ Equity
	Common Stock
	Shares		Amount
	(In thousands, except share data)
Balance at January 1, 2018	183,105,910		$	1,831		$	4,416,250		$	(40,539	)	$	(1,275,928	)	$	3,101,614
Net income	—		—			—			—			296,559			296,559
Other Comprehensive Loss	—		—			—			(5,815		)	—			(5,815		)
Stock-based Compensation	—		—			9,654			—			—			9,654
Shares Repurchased	(10,505,469	)	(105		)	(109,892		)	—			—			(109,997		)
Issuance of Restricted Stock	618,202		6			(6		)	—			—			—
Balance at September 30, 2018	173,218,643		$	1,732		$	4,316,006		$	(46,354	)	$	(979,369	)	$	3,292,015
Balance at January 1, 2017	158,829,816		$	1,588		$	3,946,442		$	(53,058	)	$	(1,711,080	)	$	2,183,892
Net income	—		—			—			—			278,626			278,626
Other Comprehensive Income									12,719			—			12,719
Stock-based Compensation	—		—			7,988			—			—			7,988
Issuance of Common Stock for the Vitruvian Acquisition, net of related expenses	23,852,117		239			459,197			—			—			459,436
Issuance of Restricted Stock	399,843		4			(4		)	—			—			—
Balance at September 30, 2017	183,081,776		$	1,831		$	4,413,623		$	(40,339	)	$	(1,432,454	)	$	2,942,661

See accompanying notes to consolidated financial statements.

5

GULFPORT ENERGY CORPORATION

CONSOLIDATED STATEMENTS OF CASH FLOWS

(Unaudited)

	Nine months ended September 30,
	2018			2017
	(In thousands)
Cash flows from operating activities:
Net income	$	296,559		$	278,626
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion expense	3,056			1,148
Depletion, depreciation and amortization	352,848			254,887
Stock-based compensation expense	5,792			4,793
(Income) loss from equity investments	(35,040		)	34,018
Change in fair value of derivative instruments	106,373			(129,692		)
Deferred income tax benefit	(69		)	—
Amortization of loan commitment fees	4,554			3,548
Gain on sale of equity method investments	(124,768		)	(12,523		)
Distributions from equity method investments	1,978			—
Changes in operating assets and liabilities:
Increase in accounts receivable—oil and natural gas sales	(10,618		)	(20,056		)
Increase in accounts receivable—joint interest and other	(2,277		)	(23,289		)
Increase in accounts receivable—related parties	(79		)	(346		)
Increase in prepaid expenses and other current assets	(4,830		)	(2,531		)
Decrease (increase) in other assets	1,228			(5,665		)
Increase in accounts payable, accrued liabilities and other	14,968			111,335
Settlement of asset retirement obligation	(719		)	(2,520		)
Net cash provided by operating activities	608,956			491,733
Cash flows from investing activities:
Additions to other property and equipment	(7,134		)	(16,288		)
Acquisition of oil and natural gas properties	—			(1,339,456		)
Additions to oil and natural gas properties	(755,263		)	(789,743		)
Proceeds from sale of oil and natural gas properties	4,820			4,079
Proceeds from sale of other property and equipment	217			658
Proceeds from sale of equity method investments	226,487			—
Contributions to equity method investments	(2,318		)	(44,844		)
Distributions from equity method investments	446			4,114
Net cash used in investing activities	(532,745		)	(2,181,480		)
Cash flows from financing activities:
Principal payments on borrowings	(165,428		)	(183		)
Borrowings on line of credit	225,000			365,000
Borrowings on term loan	—			2,951
Debt issuance costs and loan commitment fees	(772		)	(8,261		)
Payments on repurchase of stock	(109,997		)	—
Proceeds from issuance of common stock, net of offering costs	—			(5,364		)
Net cash (used in) provided by financing activities	(51,197		)	354,143
Net increase (decrease) in cash, cash equivalents and restricted cash	25,014			(1,335,604		)
Cash, cash equivalents and restricted cash at beginning of period	99,557			1,460,875
Cash, cash equivalents and restricted cash at end of period	$	124,571		$	125,271
Supplemental disclosure of cash flow information:
Interest payments	$	75,045		$	50,826
Income tax payments	$	—		$	—
Supplemental disclosure of non-cash transactions:
Capitalized stock-based compensation	$	3,862		$	3,195
Asset retirement obligation capitalized	$	1,094		$	11,557
Interest capitalized	$	3,956		$	8,753
Foreign currency translation (loss) gain on equity method investments	$	(5,815	)	$	12,719

 See accompanying notes to consolidated financial statements.

6

GULFPORT ENERGY CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

These consolidated financial statements have been prepared by Gulfport Energy Corporation (the “Company” or “Gulfport”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods, on a basis consistent with the annual audited consolidated financial statements. All such adjustments are of a normal recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles ("GAAP") have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the summary of significant accounting policies and notes thereto included in the Company’s most recent annual report on Form 10-K. Results for the three and nine month periods ended September 30, 2018 are not necessarily indicative of the results expected for the full year.

1. ACQUISITIONS

Vitruvian Acquisition

In December 2016, the Company, through its wholly-owned subsidiary Gulfport MidCon LLC (“Gulfport MidCon”) (formerly known as SCOOP Acquisition Company, LLC), entered into an agreement to acquire certain assets of Vitruvian II Woodford, LLC (“Vitruvian”), an unrelated third-party seller (the “Vitruvian Acquisition”). The assets included in the Vitruvian Acquisition include 46,400 net surface acres located in Grady, Stephens and Garvin Counties, Oklahoma. On February 17, 2017, the Company completed the Vitruvian Acquisition for a total initial purchase price of approximately $1.85 billion, consisting of $1.35 billion in cash, subject to certain adjustments, and approximately 23.9 million shares of the Company’s common stock (of which approximately 5.2 million shares were placed in an indemnity escrow). The cash portion of the purchase price was funded with the net proceeds from the Company's December 2016 common stock and senior note offerings and cash on hand. Acquisition costs of $0.03 million and $2.4 million were incurred during the three and nine months ended September 30, 2017, respectively, related to the Vitruvian Acquisition.No acquisition costs were incurred during the three and nine months ended September 30, 2018.

Allocation of Purchase Price

The Vitruvian Acquisition qualified as a business combination for accounting purposes and, as such, the Company estimated the fair value of the acquired properties as of the February 17, 2017 acquisition date. The fair value of the assets acquired and liabilities assumed was estimated using assumptions that represent Level 3 inputs. See Note 11 for additional discussion of the measurement inputs.

The Company estimated that the consideration paid in the Vitruvian Acquisition for these properties approximated the fair value that would be paid by a typical market participant. As a result,nogoodwill or bargain purchase gain was recognized in conjunction with the purchase.

The following table summarizes the consideration paid by the Company in the Vitruvian Acquisition to acquire the properties and the fair value amount of the assets acquired as of February 17, 2017.

7

	(In thousands)
Consideration:
Cash, net of purchase price adjustments	$	1,354,093
Fair value of Gulfport’s common stock issued	464,639
Total consideration	$	1,818,732
Estimated fair value of identifiable assets acquired and liabilities assumed:
Oil and natural gas properties
Proved properties	$	362,264
Unproved properties	1,462,957
Asset retirement obligations	(6,489		)
Total fair value of net identifiable assets acquired	$	1,818,732

The equity consideration included in the initial purchase price was based on an equity offering price of $20.96 on December 15, 2016. The decrease in the price of Gulfport’s common stock from $20.96 on December 15, 2016 to $19.48 on February 17, 2017 resulted in a decrease to the fair value of the total consideration paid as compared to the initial purchase price of approximately $35.3 million, which resulted in a closing date fair value lower than the initial purchase price.

Post-Acquisition Operating Results

For the three months ended September 30, 2017 and the period from the acquisition date of February 17, 2017 to September 30, 2017, the assets acquired in the Vitruvian Acquisition contributed the following amounts of revenue to the Company's consolidated statements of operations. The amount of net income contributed by the assets is not presented below as it is impracticable to calculate due to the Company integrating the acquired assets into its overall operations using the full cost method of accounting.

			Period from
			February 17, 2017
	Three months ended		to
	September 30, 2017		September 30, 2017
	(In thousands)
Revenue	$	60,940	$	137,706

Pro Forma Information (Unaudited)

The following unaudited pro forma combined financial information presents the Company’s results as though the Vitruvian Acquisition had been completed at January 1, 2017. The pro forma combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the Vitruvian Acquisition taken place on January 1, 2017; furthermore, the financial information is not intended to be a projection of future results.

	Three months ended		Nine months ended
	September 30, 2017		September 30, 2017
	(In thousands, except share data)
Pro forma revenue	$	265,498	$	958,354
Pro forma net income	$	18,235	$	300,052
Pro forma earnings per share (basic)	$	0.10	$	1.68
Pro forma earnings per share (diluted)	$	0.10	$	1.68

8

2. PROPERTY AND EQUIPMENT

The major categories of property and equipment and related accumulated depletion, depreciation, amortization and impairment as of September 30, 2018 and December 31, 2017 are as follows:

	September 30, 2018			December 31, 2017
	(In thousands)
Oil and natural gas properties	$	9,936,714		$	9,169,156
Office furniture and fixtures	42,302			37,369
Building	44,565			44,565
Land	5,521			4,820
Total property and equipment	10,029,102			9,255,910
Accumulated depletion, depreciation, amortization and impairment	(4,506,306		)	(4,153,733		)
Property and equipment, net	$	5,522,796		$	5,102,177

Under 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 oil and natural gas properties. At September 30, 2018, the calculated ceiling was greater than the net book value of the Company’s oil and natural gas properties, thus no ceiling test impairment was required for the nine months ended September 30, 2018. No impairment was required for oil and natural gas properties for thenine months ended September 30, 2017.

Included in oil and natural gas properties at September 30, 2018 is the cumulative capitalization of $194.4 million in general and administrative costs incurred and capitalized to the full cost pool. General and administrative costs capitalized to the full cost pool represent management’s estimate of costs incurred directly related to exploration and development activities such as geological and other administrative costs associated with overseeing the exploration and development activities. All general and administrative costs not directly associated with exploration and development activities were charged to expense as they were incurred. Capitalized general and administrative costs were approximately $10.6 million and $28.8 million for the three and nine months ended September 30, 2018, respectively, and $8.9 million and $25.6 million for the three and nine months ended September 30, 2017, respectively.

The average depletion rate per Mcfe, which is a function of capitalized costs, future development costs and the related underlying reserves in the periods presented, was $0.94 and $0.89 per Mcfe for the nine months ended September 30, 2018 and 2017, respectively.

The following table summarizes the Company’s non-producing properties excluded from amortization by area at September 30, 2018:

	September 30, 2018
	(In thousands)
Utica	$	1,522,633
MidContinent	1,401,392
Niobrara	449
Southern Louisiana	571
Bakken	100
	$	2,925,145

At December 31, 2017, approximately $2.9 billion of non-producing leasehold costs was not subject to amortization.

The Company evaluates the costs excluded from its amortization calculation at least annually. Subject to industry conditions and the level of the Company’s activities, the inclusion of most of the above referenced costs into the Company’s amortization calculation typically occurs within three to five years. However, the majority of the Company’s non-producing leases in the Utica Shale have five-year extension terms which could extend this time frame beyond five years.

9

A reconciliation of the Company’s asset retirement obligation for the nine months ended September 30, 2018 and 2017 is as follows:

	September 30, 2018			September 30, 2017
	(In thousands)
Asset retirement obligation, beginning of period	$	75,100		$	34,276
Liabilities incurred	1,468			11,557
Liabilities settled	(719		)	(2,520		)
Accretion expense	3,056			1,148
Revisions in estimated cash flows	(374		)	—
Asset retirement obligation as of end of period	78,531			44,461
Less current portion	120			195
Asset retirement obligation, long-term	$	78,411		$	44,266

3. EQUITY INVESTMENTS

Investments accounted for by the equity method consist of the following as of September 30, 2018 and December 31, 2017:

			Carrying value				(Income) loss from equity method investments
	Approximate ownership %		September 30, 2018		December 31, 2017		Three months ended September 30,						Nine months ended September 30,
							2018			2017			2018			2017
			(In thousands)
Investment in Tatex Thailand II, LLC	23.5	%	$	—	$	—	$	(137	)	$	(95	)	$	(241	)	$	(549	)
Investment in Grizzly Oil Sands ULC	24.9999	%	53,381		57,641		275			296			833			869
Investment in Timber Wolf Terminals LLC	50.0	%	—		983		—			4			536			8
Investment in Windsor Midstream LLC	22.5	%	39		30		—			(2		)	(9		)	25,232
Investment in Stingray Cementing LLC(1)	—	%	—		—		—			—			—			205
Investment in Stingray Energy Services LLC(1)	—	%	—		—		—			—			—			282
Investment in Sturgeon Acquisitions LLC(1)	—	%	—		—		—			—			—			(71		)
Investment in Mammoth Energy Services, Inc.(1)	22.0	%	179,109		165,715		(12,996		)	2,407			(35,708		)	4,907
Investment in Strike Force Midstream LLC(2)	—	%	—		77,743		—			127			(693		)	2,585
			$	232,529	$	302,112	$	(12,858	)	$	2,737		$	(35,282	)	$	33,468

(1)	On June 5, 2017, Mammoth Energy Services, Inc. ("Mammoth Energy") acquired Stingray Cementing LLC, Stingray Energy Services LLC and Sturgeon Acquisitions LLC. See below under Mammoth Energy Partners LP/Mammoth Energy Services, Inc. for information regarding these transactions.
(2)	On May 1, 2018, the Company sold its 25% interest in Strike Force Midstream to EQT Midstream Partners, LP. See below under under Strike Force Midstream LLC for information regarding this transaction.

The tables below summarize financial information for the Company’s equity investments as of September 30, 2018 and December 31, 2017.

10

Summarized balance sheet information:

	September 30, 2018		December 31, 2017
	(In thousands)
Current assets	$	481,394	$	415,032
Noncurrent assets	$	1,336,604	$	1,542,090
Current liabilities	$	358,177	$	261,086
Noncurrent liabilities	$	48,328	$	148,839

Summarized results of operations:    

	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
	(In thousands)
Gross revenue	$	384,043	$	160,950	$	1,451,580	$	357,901
Net income (loss)	$	68,414	$	2,101	$	181,884	$	(109,651	)

Tatex Thailand II, LLC

The Company has an indirect ownership interest in Tatex Thailand II, LLC (“Tatex II”). Tatex II holds an 8.5% interest in APICO, LLC (“APICO”), an international oil and gas exploration company. APICO has a reserve base located in Southeast Asia through its ownership of concessions covering approximately 180,000 acres which includes the Phu Horm Field. The Company received $0.2 million and $0.5 million in distributions from Tatex II during the nine months ended September 30, 2018 and 2017, respectively.

Tatex Thailand III, LLC

The Company has an ownership interest in Tatex Thailand III, LLC (“Tatex III”). Tatex III previously owned a concession covering approximately 245,000 acres in Southeast Asia. As of December 31, 2014, the Company reviewed its investment in Tatex III and, together with Tatex III, made the decision to allow the concession to expire in January 2015. As such, the Company fully impaired the asset as of December 31, 2014. In December 2017, Tatex III was dissolved and the Company received a final distribution of $0.2 million.

Grizzly Oil Sands ULC

The Company, through its wholly owned subsidiary Grizzly Holdings Inc. (“Grizzly Holdings”), owns an interest in Grizzly Oil Sands ULC (“Grizzly”), a Canadian unlimited liability company. The remaining interest in Grizzly is owned by Grizzly Oil Sands Inc. (“Oil Sands”). As of September 30, 2018, Grizzly had approximately 830,000 acres under lease in the Athabasca, Peace River and Cold Lake oil sands regions of Alberta, Canada. Grizzly has high-graded three oil sands projects to various stages of development. Grizzly commenced commercial production from its Algar Lake Phase I steam-assisted gravity drainage ("SAGD") oil sand project during the second quarter of 2014 and has regulatory approval for up to 11,300 barrels per day of bitumen production. Algar Lake production peaked at 2,200 barrels per day during the ramp-up phase of the SAGD facility, however, in April 2015, Grizzly made the decision to suspend operations at its Algar Lake facility due to the commodity price drop and its effect on project economics. Grizzly continues to monitor market conditions as it assesses start up plans for the facility. The Company reviewed its investment in Grizzly for impairment at September 30, 2018 and 2017 and determined no impairment was required. If commodity prices decline in the future however, impairment of the investment in Grizzly may be necessary. During the nine months ended September 30, 2018, Gulfport paid $2.3 million in cash calls. Grizzly’s functional currency is the Canadian dollar. The Company’s investment in Grizzly was increased by a $2.9 million foreign currency translation gain and decreased by a $5.7 million foreign currency translation loss for the three and nine months ended September 30, 2018, respectively. The Company’s investment in Grizzly was increased by $6.7 million and $12.5 million as a result of a foreign currency translation gain for the three and nine months ended September 30, 2017, respectively.

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Timber Wolf Terminals LLC

During 2012, the Company invested in Timber Wolf Terminals LLC (“Timber Wolf”). Timber Wolf was formed to operate a crude/condensate terminal and a sand transloading facility in Ohio. During the nine months ended September 30, 2018 and 2017, the Company paid no cash calls to Timber Wolf. The Company received $0.4 million in distributions from Timber Wolf during the nine months ended September 30, 2018 resulting from the sale of assets held by Timber Wolf.

Windsor Midstream LLC

At September 30, 2018, the Company held a 22.5% interest in Windsor Midstream LLC (“Midstream”), an entity controlled and managed by an unrelated third party. The Company received no distributions from Midstream during the nine months ended September 30, 2018 and $0.5 million in distributions during the same period in 2017.

Stingray Cementing LLC

During 2012, the Company invested in Stingray Cementing LLC (“Stingray Cementing”). Stingray Cementing provides well cementing services. The (income) loss from equity method investments presented in the table above reflects any intercompany profit eliminations. On June 5, 2017, the Company contributed all of its membership interests in Stingray Cementing to Mammoth Energy. See below under Mammoth Energy Partners LP/Mammoth Energy Services, Inc. for information regarding this transaction.

Stingray Energy Services LLC

During 2013, the Company invested in Stingray Energy Services LLC (“Stingray Energy”). Stingray Energy provides rental tools for land-based oil and natural gas drilling, completion and workover activities as well as the transfer of fresh water to wellsites. The (income) loss from equity method investments presented in the table above reflects any intercompany profit eliminations. On June 5, 2017, the Company contributed all of its membership interests in Stingray Energy to Mammoth Energy. See below under Mammoth Energy Partners LP/Mammoth Energy Services, Inc. for information regarding this transaction.

Sturgeon Acquisitions LLC

During 2014, the Company invested in Sturgeon Acquisitions LLC (“Sturgeon”) and received an ownership interest of 25% in Sturgeon. Sturgeon owns and operates sand mines that produce hydraulic fracturing grade sand. On June 5, 2017, the Company contributed all of its membership interests in Sturgeon to Mammoth Energy. See below under Mammoth Energy Partners LP/Mammoth Energy Services, Inc. for information regarding this transaction.

Mammoth Energy Partners LP/Mammoth Energy Services, Inc.

In the fourth quarter of 2014, the Company contributed its investments in four entities to Mammoth Energy Partners LP (“Mammoth”) for a 30.5% interest in this entity. In October 2016, Mammoth converted from a limited partnership into a limited liability company named Mammoth Energy Partners LLC (“Mammoth LLC”) and the Company and the other members of Mammoth LLC contributed their interests in Mammoth LLC to Mammoth Energy. Following the contribution, Mammoth Energy completed its initial public offering of shares of its common stock.

On June 5, 2017, the Company contributed all of its membership interests in Sturgeon (which owned Taylor Frac, LLC, Taylor Real Estate Investments, LLC and South River Road, LLC), Stingray Energy and Stingray Cementing to Mammoth Energy in exchange for approximately 2.0 million shares of Mammoth Energy common stock (the "June 2017 Transactions"). The Company accounted for the transactions as a sale of financial assets under ASC 860, Transfers and Servicing. The Company valued the shares of Mammoth Energy common stock it received in the June 2017 Transactions at $18.50 per share, which was the closing price of Mammoth Energy common stock on June 5, 2017. During the second quarter of 2017, the Company recognized a gain of $12.5 million from the June 2017 Transactions, which is included in gain on sale of equity method investments in the accompanying consolidated statement of operations.

On June 29, 2018, the Company sold 1,235,600 shares of its Mammoth Energy common stock in an underwritten public offering for net proceeds of approximately $47.0 million. In connection with the Company's public offering of a portion of its shares of Mammoth Energy common stock, the Company granted the underwriters an option to purchase additional shares of its Mammoth Energy common stock. On July 26, 2018, the underwriters exercised this option, in part, and on July 30, 2018, the

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Company sold an additional 118,974 shares for net proceeds of approximately $4.5 million. Following the sales of these shares, the Company owned 9,829,548 shares, or approximately 22.0%, of Mammoth Energy's outstanding common stock. As a result of the sales, the Company recorded a gain of $2.7 million and $28.3 million for the three and nine months ended September 30, 2018, which is included in gain on sale of equity method investments in the accompanying consolidated statements of operations.

The Company’s investment in Mammoth Energy was increased by a $0.1 million foreign currency gain and decreased by a $0.2 million foreign currency loss resulting from Mammoth Energy’s foreign subsidiary for the three and nine months ended September 30, 2018, respectively. The Company’s investment in Mammoth Energy was increased by a $0.16 million and $0.2 million foreign currency gain resulting from Mammoth Energy’s foreign subsidiary for the three and nine months ended September 30, 2017, respectively. During the nine months ended September 30, 2018, Gulfport received distributions of $1.2 million from Mammoth Energy as a result of a $0.125 per share dividend in August 2018. The (income) loss from equity method investments presented in the table above reflects any intercompany profit eliminations.

Strike Force Midstream LLC

In February 2016, the Company, through its wholly-owned subsidiary Gulfport Midstream Holdings, LLC (“Midstream Holdings”), entered into an agreement with Rice Midstream Holdings LLC (“Rice”), then a subsidiary of Rice Energy Inc., to develop natural gas gathering assets in eastern Belmont County and Monroe County, Ohio through Strike Force Midstream LLC ("Strike Force"). In 2017, Rice was acquired by EQT Corporation ("EQT"). Prior to the sale of the Company's interest in Strike Force (discussed below), the Company owned a 25% interest in Strike Force, and EQT acted as operator and owned the remaining 75% interest. Strike Force's gathering assets provide gathering services for wells operated by Gulfport and other operators and connectivity of existing dry gas gathering systems. Prior to the sale of its interest in Strike Force, the Company elected to report its proportionate share of Strike Force’s earnings on a one-quarter lag as permitted under ASC 323, Investments - Equity Method and Joint Ventures. The (income) loss from equity method investments presented in the table above reflects any intercompany profit eliminations.

During the nine months ended September 30, 2018, Gulfport received distributions of $0.8 million from Strike Force. During the nine months ended September 30, 2017, Gulfport paid $43.0 million in cash calls to Strike Force and received distributions of $3.6 million from Strike Force.

On May 1, 2018, the Company sold its 25% interest in Strike Force to EQT Midstream Partners, LP for proceeds of $175.0 million in cash. As a result of the sale, the Company recognized a gain of $96.4 million net of transaction fees, which is included in gain on sale of equity method investments in the accompanying consolidated statement of operations.

4. VARIABLE INTEREST ENTITIES

As of September 30, 2018, the Company held variable interests in the following variable interest entities (“VIEs”), but was not the primary beneficiary: Midstream and Timber Wolf. These entities have governing provisions that are the functional equivalent of a limited partnership and are considered VIEs because the limited partners or non-managing members lack substantive kick-out or participating rights which causes the equity owners, as a group, to lack a controlling financial interest. The Company is a limited partner or non-managing member in each of these VIEs and is not the primary beneficiary because it does not have a controlling financial interest. The general partner or managing member has power to direct the activities that most significantly impact the VIEs’ economic performance. The Company also held a variable interest in Strike Force prior to the sale of that interest due to the fact that it did not have sufficient equity capital at risk. The Company was not the primary beneficiary of this entity. Prior to Mammoth Energy’s initial public offering, or "IPO", Mammoth LLC was considered a VIE. As a result of the Company’s contribution of its interest in Mammoth LLC to Mammoth Energy in exchange for Mammoth Energy common stock and the completion of Mammoth Energy’s IPO, the Company determined that it no longer held an interest in a VIE. Prior to the contribution of Stingray Energy, Stingray Cementing and Sturgeon to Mammoth Energy, these entities were considered VIEs. As a result of the Company’s contribution of its membership interests in Stingray Energy, Stingray Cementing and Sturgeon to Mammoth Energy in exchange for Mammoth Energy common stock, the Company determined that it no longer held an interest in a VIE.

The Company accounts for its investment in these VIEs following the equity method of accounting. The carrying amounts of the Company’s equity investments are classified as other non-current assets on the accompanying consolidated balance sheets. The Company’s maximum exposure to loss as a result of its involvement with these VIEs is based on the Company’s capital contributions and the economic performance of the VIEs, and is equal to the carrying value of the Company’s investments which is the maximum loss the Company could be required to record in the consolidated statements of operations. See Note 3 for further discussion of these entities, including the carrying amounts of each investment.

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5. LONG-TERM DEBT

Long-term debt consisted of the following items as of September 30, 2018 and December 31, 2017:

	September 30, 2018			December 31, 2017
	(In thousands)
Revolving credit agreement (1)	$	60,000		$	—
6.625% senior unsecured notes due 2023 (2)	350,000			350,000
6.000% senior unsecured notes due 2024 (3)	650,000			650,000
6.375% senior unsecured notes due 2025 (4)	600,000			600,000
6.375% senior unsecured notes due 2026 (5)	450,000			450,000
Net unamortized debt issuance costs (6)	(31,824		)	(34,781		)
Construction loan (7)	23,296			23,724
Less: current maturities of long term debt	(647		)	(622		)
Debt reflected as long term	$	2,100,825		$	2,038,321

The Company capitalized approximately $1.6 million and $4.0 million in interest expense to undeveloped oil and natural gas properties during the three and nine months ended September 30, 2018, respectively. The Company capitalized approximately $2.1 million and $8.8 million in interest expense to undeveloped oil and natural gas properties during the three and nine months ended September 30, 2017, respectively.

(1) The Company has entered into a senior secured revolving credit facility, as amended, with The Bank of Nova Scotia, as the lead arranger and administrative agent and certain lenders from time to time party thereto. The credit agreement provides for a maximum facility amount of $1.5 billion and matures on December 31, 2021. On March 29, 2017, the Company further amended its revolving credit facility to, among other things, amend the definition of the term EBITDAX to permit pro forma treatment of acquisitions that involve the payment of consideration by Gulfport and its subsidiaries in excess of $50.0 million and of dispositions of property or series of related dispositions of properties that yields gross proceeds to Gulfport or any of its subsidiaries in excess of $50.0 million. On May 4, 2017, the revolving credit facility was further amended to increase the borrowing base from $700.0 million to $1.0 billion, adjust certain of the Company’s investment baskets and add five additional banks to the syndicate. On November 21, 2017, the Company further amended its revolving credit facility to, among other things, (a) decrease the applicable rate for all loans by 0.5% and (b) add a provision that allows Gulfport to elect a commitment amount (the “Elected Commitment Amount”) that is less than the borrowing base. In connection with this amendment, the borrowing base was set at $1.2 billion, with an elected commitment of $1.0 billion. On May 21, 2018, the Company further amended its revolving credit facility to, among other things, (a) decrease the applicable rate for all loans by 0.25%, (b) permit Gulfport and each of its subsidiaries to use the proceeds from dispositions of certain investments to acquire the common stock or other equity interests of Gulfport, subject to certain limitations and (c) increase the borrowing base to $1.4 billion, with an elected commitment of $1.0 billion.

As of September 30, 2018, $60.0 million was outstanding under the revolving credit facility and the total availability for future borrowings under this facility, after giving effect to an aggregate of $316.2 million of letters of credit, was $623.8 million. The Company’s wholly-owned subsidiaries have guaranteed the obligations of the Company under the revolving credit facility.

Advances under the revolving credit facility may be in the form of either base rate loans or eurodollar loans. The interest rate for base rate loans is equal to (1) the applicable rate, which ranges from 0.25% to 1.25%, plus (2) the highest of: (a) the federal funds rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by agent as its “prime rate,” and (c) the eurodollar rate for an interest period of one month plus 1.00%. The interest rate for eurodollar loans is equal to (1) the applicable rate, which ranges from 1.25% to 2.25%, plus (2) the London interbank offered rate that appears on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate for deposits in U.S. dollars, or, if such rate is not available, the rate as administered by ICE Benchmark Administration (or any other person that takes over administration of such rate) per annum equal to the offered rate on such other page or service that displays on average London interbank offered rate as determined by ICE Benchmark Administration (or any other person that takes over administration of such rate) for deposits in U.S. dollars, or, if such rate is not available, the average quotations for three major New York money center banks of whom the agent shall inquire as the “London Interbank Offered Rate” for deposits in U.S. dollars. At

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September 30, 2018, amounts borrowed under the credit facility bore interest at the eurodollar rate with a weighted average of 3.72%.

The revolving credit facility contains customary negative covenants including, but not limited to, restrictions on the Company’s and its subsidiaries’ ability to:

•incur indebtedness;

•grant liens;

•pay dividends and make other restricted payments;

•make investments;

•make fundamental changes;

•enter into swap contracts;

•dispose of assets;

•change the nature of their business; and

•enter into transactions with affiliates.

The negative covenants are subject to certain exceptions as specified in the revolving credit facility. The revolving credit facility also contains certain affirmative covenants, including, but not limited to the following financial covenants:

(i) the ratio of net funded debt to EBITDAX (net income, excluding (i) any non-cash revenue or expense associated with swap contracts resulting from ASC 815 and (ii) any cash or non-cash revenue or expense attributable to minority investments plus without duplication and, in the case of expenses, to the extent deducted from revenues in determining net income, the sum of (a) the aggregate amount of consolidated interest expense for such period, (b) the aggregate amount of income, franchise, capital or similar tax expense (other than ad valorem taxes) for such period, (c) all amounts attributable to depletion, depreciation, amortization and asset or goodwill impairment or writedown for such period, (d) all other non-cash charges, (e) exploration costs deducted in determining net income under successful efforts accounting, (f) actual cash distributions received from minority investments, (g) to the extent actually reimbursed by insurance, expenses with respect to liability on casualty events or business interruption, and (h) all reasonable transaction expenses related to dispositions and acquisitions of assets, investments and debt and equity offerings (provided that expenses related to any unsuccessful disposition will be limited to $3.0 million in the aggregate) for a twelve-month period may not be greater than 4.00 to 1.00; and

(ii) the ratio of EBITDAX to interest expense for a twelve-month period may not be less than 3.00 to 1.00.

The Company was in compliance with its financial covenants at September 30, 2018.

(2) On April 21, 2015, the Company issued $350.0 million in aggregate principal amount of 6.625% Senior Notes due 2023 (the “2023 Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act (the “2023 Notes Offering”). The Company received net proceeds of approximately $343.6 million after initial purchaser discounts and commissions and estimated offering expenses.

The 2023 Notes were issued under an indenture, dated as of April 21, 2015, among the Company, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee. In October 2015, the 2023 Notes were exchanged for a new issue of substantially identical debt securities registered under the Securities Act. Pursuant to the indenture relating to the 2023 Notes, interest on the 2023 Notes accrues at a rate of 6.625% per annum on the outstanding principal amount thereof, payable semi-annually on May 1 and November 1 of each year. The 2023 Notes are not guaranteed by Grizzly Holdings, Inc. and will not be guaranteed by any of the Company’s future unrestricted subsidiaries.

(3) On October 14, 2016, the Company issued $650.0 million in aggregate principal amount of 6.000% Senior Notes due 2014 (the "2024 Notes"). The 2024 Notes were issued under an indenture, dated as of October 14, 2016, among the Company, the subsidiary guarantors party thereto and the senior note indenture trustee (the “2024 Indenture”), to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act (the “2024 Notes Offering”). Under the 2024 Indenture, interest on the 2024 Notes accrues at a rate of 6.000% per annum on the outstanding principal amount thereof from October 14, 2016, payable semi-annually on April 15 and October 15 of each year, commencing on April 15, 2017. The 2024 Notes will mature on October 15, 2024. The Company

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received approximately $638.9 million in net proceeds from the offering of the 2024 Notes, which was used, together with cash on hand, to purchase the then outstanding 2020 Notes in a concurrent cash tender offer, to pay fees and expenses thereof, and to redeem any of the 2020 Notes that remained outstanding after the completion of the tender offer.

(4) On December 21, 2016, the Company issued $600.0 million in aggregate principal amount of 6.375% Senior Notes due 2025 (the “2025 Notes”). The 2025 Notes were issued under an indenture, dated as of December 21, 2016, among the Company, the subsidiary guarantors party thereto and the senior note indenture trustee (the “2025 Indenture”), to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. Under the 2025 Indenture, interest on the 2025 Notes accrues at a rate of 6.375% per annum on the outstanding principal amount thereof from December 21, 2016, payable semi-annually on May 15 and November 15 of each year, commencing on May 15, 2017. The 2025 Notes will mature on May 15, 2025. The Company received approximately $584.7 million in net proceeds from the offering of the 2025 Notes, which was used, together with the net proceeds from the Company’s December 2016 common stock offering and cash on hand, to fund the cash portion of the purchase price for the Vitruvian Acquisition. See “Note 1 – Acquisitions” for additional discussion of the Vitruvian Acquisition.

(5) On October 11, 2017, the Company issued $450.0 million in aggregate principal amount of its 6.375% Senior Notes due 2026 (the “2026 Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. Interest on the 2026 Notes accrues at a rate of 6.375% per annum on the outstanding principal amount thereof from October 11, 2017, payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2018. The 2026 Notes will mature on January 15, 2026. The Company received approximately $444.1 million in net proceeds from the offering of the 2026 Notes, a portion of which was used to repay all of the Company's outstanding borrowings under its secured revolving credit facility on October 11, 2017 and the balance was used to fund the remaining outspend related to the Company's 2017 capital development plans.

In connection with the 2026 Notes offering, the Company and its subsidiary guarantors entered into a registration rights agreement pursuant to which the Company agreed to file a registration statement with respect to an offer to exchange the 2026 Notes for a new issue of substantially identical debt securities registered under the Securities Act. On January 18, 2018, the Company filed a registration statement on Form S-4 with respect to an offer to exchange the 2026 Notes for substantially identical debt securities registered under the Securities Act, which registration statement was declared effective by the SEC on February 12, 2018. The exchange offer relating to the 2026 notes closed on March 22, 2018.

(6) Loan issuance costs related to the 2023 Notes, the 2024 Notes, the 2025 Notes and the 2026 Notes (collectively the “Notes”) have been presented as a reduction to the Notes. At September 30, 2018, total unamortized debt issuance costs were $4.6 million for the 2023 Notes, $9.0 million for the 2024 Notes, $12.9 million for the 2025 Notes and $5.2 million for the 2026 Notes. In addition, loan commitment fee costs for the construction loan agreement described immediately below were $0.1 million at September 30, 2018.

(7) On June 4, 2015, the Company entered into a construction loan agreement (the “Construction Loan”) with InterBank for the construction of a new corporate headquarters in Oklahoma City, which was substantially completed in December 2016. The Construction Loan allows for maximum principal borrowings of $24.5 million and required the Company to fund 30% of the cost of the construction before any funds could be drawn, which occurred in January 2016. Interest accrues daily on the outstanding principal balance at a fixed rate of 4.50% per annum and was payable on the last day of the month through May 31, 2017. Starting June 30, 2017, the Company began making monthly payments of principal and interest, with the final payment due June 4, 2025. At September 30, 2018, the total borrowings under the Construction Loan were approximately $23.3 million.

6. COMMON STOCK AND CHANGES IN CAPITALIZATION

Issuance of Common Stock

On February 17, 2017, the Company completed the Vitruvian Acquisition for a total initial purchase price of approximately $1.85 billion, consisting of $1.35 billion in cash, subject to certain adjustments, and approximately 23.9 million shares of the Company’s common stock (of which approximately 5.2 million shares are subject to the indemnity escrow). See “Note 1 - Acquisitions” for additional discussion of the Vitruvian Acquisition.

Stock Repurchase Program

In January 2018, the board of directors of the Company approved a stock repurchase program to acquire up to $100 million of the Company's outstanding stock during 2018. In May 2018, the Company's board of directors authorized the expansion of

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its stock repurchase program, authorizing the Company to acquire up to an additional $100 million of its outstanding common stock during 2018 for a total of up to $200 million. Purchases under the repurchase program may be made from time to time in open market or privately negotiated transactions, and are subject to market conditions, applicable legal requirements, contractual obligations and other factors. The repurchase program does not require the Company to acquire any specific number of shares. This repurchase program is authorized to extend through December 31, 2018 and may be suspended from time to time, modified, extended or discontinued by the board of directors at any time. The Company repurchased 0.4 million and 10.5 million shares for a cost of approximately $5.0 million and $110.0 million during the three and nine months ended September 30, 2018, respectively. All repurchased shares have been retired.

7. STOCK-BASED COMPENSATION

During the three and nine months ended September 30, 2018, the Company’s stock-based compensation cost was $3.6 million and $9.7 million, respectively, of which the Company capitalized $1.4 million and $3.9 million, respectively, relating to its exploration and development efforts. During the three and nine months ended September 30, 2017, the Company’s stock-based compensation cost was $2.8 million and $8.0 million, respectively, of which the Company capitalized $1.1 million and $3.2 million, respectively, relating to its exploration and development efforts.

The following table summarizes restricted stock activity for the nine months ended September 30, 2018:

	Number of Unvested Restricted Shares		Weighted Average Grant Date Fair Value
Unvested shares as of January 1, 2018	976,027		$	18.71
Granted	1,197,628		9.45
Vested	(618,202	)	17.77
Forfeited	(32,633	)	17.31
Unvested shares as of September 30, 2018	1,522,820		$	11.84

Unrecognized compensation expense as of September 30, 2018 related to restricted shares was $15.5 million. The expense is expected to be recognized over a weighted average period of 1.63 years.

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8. EARNINGS PER SHARE

Reconciliations of the components of basic and diluted net income per common share are presented in the tables below:

	Three months ended September 30,
	2018					2017
	Income		Shares	Per Share		Income		Shares	Per Share
	(In thousands, except share data)
Basic:
Net income	$	95,150	173,057,538	$	0.55	$	18,235	182,957,416	$	0.10
Effect of dilutive securities:
Stock options and awards	—		247,376			—		51,020
Diluted:
Net income	$	95,150	173,304,914	$	0.55	$	18,235	183,008,436	$	0.10

	Nine months ended September 30,
	2018					2017
	Income		Shares	Per Share		Income		Shares	Per Share
	(In thousands, except share data)
Basic:
Net income	$	296,559	175,776,312	$	1.69	$	278,626	178,736,569	$	1.56
Effect of dilutive securities:
Stock options and awards	—		664,149			—		394,001
Diluted:
Net income	$	296,559	176,440,461	$	1.68	$	278,626	179,130,570	$	1.56

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9. COMMITMENTS AND CONTINGENCIES

Plugging and Abandonment Funds

In connection with the Company’s acquisition in 1997 of the remaining 50% interest in its WCBB properties, the Company assumed the seller’s (Chevron) obligation to contribute approximately $18,000 per month through March 2004 to a plugging and abandonment trust and the obligation to plug a minimum of 20 wells per year for 20 years commencing March 11, 1997. Beginning in 2009, the Company could access the trust for use in plugging and abandonment charges associated with the property, although it has not yet done so. As of September 30, 2018, the plugging and abandonment trust totaled approximately $3.1 million. At September 30, 2018, the Company had plugged 555 wells at WCBB since it began its plugging program in 1997, which management believes fulfills its minimum plugging obligation.

Operating Leases

The Company leases office facilities under non-cancellable operating leases exceeding one year. Future minimum lease commitments under these leases at September 30, 2018 were as follows:

	(In thousands)
Remaining 2018	$	39
2019	144
2020	90
2021	38
Total	$	311

Firm Transportation and Sales Commitments

The Company had approximately 2,659,000 MMBtu per day of firm sales contracted with third parties. The table below presents these commitments at September 30, 2018 as follows:

	(MMBtu per day)
Remaining 2018	590,000
2019	659,000
2020	526,000
2021	372,000
2022	272,000
Thereafter	240,000
Total	2,659,000

The Company also had approximately $3.6 billion of firm transportation contracted with third parties. The table below presents these commitments at September 30, 2018 as follows:

	(In thousands)
Remaining 2018	$	62,012
2019	251,644
2020	247,581
2021	246,620
2022	246,620
Thereafter	2,511,853
Total	$	3,566,330

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Other Commitments

Effective October 1, 2014, the Company entered into a Sand Supply Agreement with Muskie Proppant LLC (“Muskie”), a subsidiary of Mammoth Energy. Effective August 3, 2018, the Company extended the agreement through December 31, 2021. Pursuant to this agreement, as amended, the Company has agreed to purchase annual and monthly amounts of proppant sand subject to exceptions specified in the agreement at agreed pricing plus agreed costs and expenses. Failure by either Muskie or the Company to deliver or accept the minimum monthly amount results in damages calculated per ton based on the difference between the monthly obligation amount and the amount actually delivered or accepted, as applicable. The Company incurred $1.3 million and $1.5 million in non-utilization fees under this agreement during the three and nine months ended September 30, 2018, respectively. The Company did not incur any non-utilization fees during the nine months ended September 30, 2017.

Effective October 1, 2014, the Company entered into an Amended and Restated Master Services Agreement for pressure pumping services with Stingray Pressure Pumping LLC (“Stingray Pressure”), a subsidiary of Mammoth Energy. Pursuant to this agreement, as amended effective July 1, 2018, Stingray Pressure has agreed to provide hydraulic fracturing, stimulation and related completion and rework services to the Company and the Company has agreed to pay Stingray Pressure a monthly service fee plus the associated costs of the services provided. The Company has the right to suspend services of one crew and only one crew at any point in time without payment, fee or other obligation associated with the suspended crew, given appropriate notification of suspension.

Future minimum commitments under these agreements at September 30, 2018 are $154.2 million.

Litigation

In two separate complaints, one filed by the State of Louisiana and the Parish of Cameron in the 38th Judicial District Court for the Parish of Cameron on February 9, 2016 and the other filed by the State of Louisiana and the District Attorney for the 15^th Judicial District of the State of Louisiana in the 15^th Judicial District Court for the Parish of Vermilion on July 29, 2016, the Company was named as a defendant, among 26 oil and gas companies, in the Cameron Parish complaint and among more than 40 oil and gas companies in the Vermilion Parish complaint, or the Complaints. The Complaints were filed under the State and Local Coastal Resources Management Act of 1978, as amended, and the rules, regulations, orders and ordinances adopted thereunder, which the Company referred to collectively as the CZM Laws, and allege that certain of the defendants’ oil and gas exploration, production and transportation operations associated with the development of the East Hackberry and West Hackberry oil and gas fields, in the case of the Cameron Parish complaint, and the Tigre Lagoon and Lac Blanc oil and gas fields, in the case of the Vermilion Parish complaint, were conducted in violation of the CZM Laws. The Complaints allege that such activities caused substantial damage to land and waterbodies located in the coastal zone of the relevant Parish, including due to defendants’ design, construction and use of waste pits and the alleged failure to properly close the waste pits and to clear, re-vegetate, detoxify and return the property affected to its original condition, as well as the defendants’ alleged discharge of waste into the coastal zone. The Complaints also allege that the defendants’ oil and gas activities have resulted in the dredging of numerous canals, which had a direct and significant impact on the state coastal waters within the relevant Parish and that the defendants, among other things, failed to design, construct and maintain these canals using the best practical techniques to prevent bank slumping, erosion and saltwater intrusion and to minimize the potential for inland movement of storm-generated surges, which activities allegedly have resulted in the erosion of marshes and the degradation of terrestrial and aquatic life therein. The Complaints also allege that the defendants failed to re-vegetate, refill, clean, detoxify and otherwise restore these canals to their original condition. In these two petitions, the plaintiffs seek damages and other appropriate relief under the CZM Laws, including the payment of costs necessary to clear, re-vegetate, detoxify and otherwise restore the affected coastal zone of the relevant Parish to its original condition, actual restoration of such coastal zone to its original condition, and the payment of reasonable attorney fees and legal expenses and pre-judgment and post judgment interest.

The Company was served with the Cameron complaint in early May 2016 and with the Vermilion complaint in early September 2016.  The Louisiana Attorney General and the Louisiana Department of Natural Resources intervened in both the Cameron Parish suit and the Vermilion Parish suit.  Shortly after the Complaints were filed, certain defendants removed the cases to the United States District Court for the Western District of Louisiana.  In both cases, the plaintiffs filed motions to remand the lawsuits to state court, which were ultimately granted by the district courts.  However, on May 23, 2018, a group of defendants again removed the Cameron Parish and Vermilion Parish lawsuits to federal court.  In response, the plaintiffs again filed motions to remand the cases to state court. The removing defendants have opposed plaintiffs’ motions to remand. The motions to remand remain pending, and further action in the cases will be stayed until the courts rule on the motions to remand.  Also, shortly after the May 23, 2018 removal, the removing defendants filed motions with the United States Judicial Panel on Multidistrict Litigation (the “MDL Panel”) requesting that the Cameron Parish and Vermilion Parish lawsuits be consolidated with 40 similar lawsuits so that pre-trial proceedings in the cases could be coordinated.  The MDL Panel denied the motion to

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consolidate the lawsuits. Due to the procedural posture of lawsuits, the cases are still in their early stages and the parties have conducted very little discovery. As a result, the Company has not had the opportunity to evaluate the applicability of the allegations made in plaintiffs' complaints to the Company's operations and management cannot determine the amount of loss, if any, that may result.

In addition, due to the nature of the Company’s business, it is, from time to time, involved in routine litigation or subject to disputes or claims related to its business activities, including workers’ compensation claims and employment related disputes. In the opinion of the Company’s management, none of the pending litigation, disputes or claims against the Company, if decided adversely, will have a material adverse effect on its financial condition, cash flows or results of operations.

10. DERIVATIVE INSTRUMENTS

Natural Gas, Oil and Natural Gas Liquids Derivative Instruments

The Company seeks to reduce its exposure to unfavorable changes in natural gas, oil and natural gas liquids ("NGLs") prices, which are subject to significant and often volatile fluctuation, by entering into over-the-counter fixed price swaps, basis swaps and various types of option contracts. These contracts allow the Company to predict with greater certainty the effective natural gas, oil and NGLs prices to be received for hedged production and benefit operating cash flows and earnings when market prices are less than the fixed prices provided in the contracts. However, the Company will not benefit from market prices that are higher than the fixed prices in the contracts for hedged production.

Fixed price swaps are settled monthly based on differences between the fixed price specified in the contract and the referenced settlement price. When the referenced settlement price is less than the price specified in the contract, the Company receives an amount from the counterparty based on the price difference multiplied by the volume. Similarly, when the referenced settlement price exceeds the price specified in the contract, the Company pays the counterparty an amount based on the price difference multiplied by the volume. The prices contained in these fixed price swaps are based on the NYMEX Henry Hub for natural gas, Argus Louisiana Light Sweet Crude for oil, the NYMEX West Texas Intermediate for oil, and Mont Belvieu for propane, pentane and ethane. Below is a summary of the Company’s open fixed price swap positions as of September 30, 2018.

	Location	Daily Volume (MMBtu/day)	Weighted Average Price
Remaining 2018	NYMEX Henry Hub	1,010,000	$	3.01
2019	NYMEX Henry Hub	1,154,000	$	2.81
2020	NYMEX Henry Hub	204,000	$	2.77

	Location	Daily Volume (Bbls/day)	Weighted Average Price
Remaining 2018	ARGUS LLS	2,000	$	56.22
2019	ARGUS LLS	1,000	$	59.55
Remaining 2018	NYMEX WTI	4,500	$	53.72
2019	NYMEX WTI	4,000	$	58.28

	Location	Daily Volume (Bbls/day)	Weighted Average Price
2019	Mont Belvieu C2	1,000	$	18.48
Remaining 2018	Mont Belvieu C3	4,000	$	29.34
2019	Mont Belvieu C3	4,000	$	28.87
Remaining 2018	Mont Belvieu C5	500	$	46.62
2019	Mont Belvieu C5	500	$	54.08

The Company sold call options and used the associated premiums to enhance the fixed price for a portion of the fixed price natural gas swaps listed above. Each short call option has an established ceiling price. When the referenced settlement price is above the price ceiling established by these short call options, the Company pays its counterparty an amount equal to the difference between the referenced settlement price and the price ceiling multiplied by the hedged contract volumes.

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	Location	Daily Volume (MMBtu/day)	Weighted Average Price
October 2018 - March 2019	NYMEX Henry Hub	50,000	$	3.13
April 2019 - December 2019	NYMEX Henry Hub	30,000	$	3.10

For a portion of the natural gas fixed price swaps listed above, the counterparty has an option to extend the original terms an additional twelve months for the period January 2019 through December 2019. The option to extend the terms expires in December 2018. If executed, the Company would have additional fixed price swaps for 100,000 MMBtu per day at a weighted average price of $3.05 per MMBtu.

In addition, the Company entered into natural gas basis swap positions, which settle on the pricing index to basis differential of Transco Zone 4 to NYMEX Henry Hub natural gas price. As of September 30, 2018, the Company had the following natural gas basis swap positions for Transco Zone 4.

	Location	Daily Volume (MMBtu/day)	Weighted Average Price
Remaining 2018	Transco Zone 4	40,000	$	(0.05	)
2019	Transco Zone 4	60,000	$	(0.05	)
2020	Transco Zone 4	60,000	$	(0.05	)

Balance Sheet Presentation

The Company reports the fair value of derivative instruments on the consolidated balance sheets as derivative instruments under current assets, noncurrent assets, current liabilities and noncurrent liabilities on a gross basis. The Company determines the current and noncurrent classification based on the timing of expected future cash flows of individual trades. The following table presents the fair value of the Company’s derivative instruments on a gross basis at September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
	(In thousands)
Short-term derivative instruments - asset	$	19,809	$	78,847
Long-term derivative instruments - asset	$	3,530	$	8,685
Short-term derivative instruments - liability	$	62,601	$	32,534
Long-term derivative instruments - liability	$	15,101	$	2,989

Gains and Losses

The following table presents the gain and loss recognized in net (loss) gain on natural gas, oil and NGL derivatives in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017.

	Net (loss) gain on derivative instruments
	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
	(In thousands)
Natural gas derivatives	$	14,101		$	(7,077	)	$	(26,789	)	$	135,868
Oil derivatives	(11,610		)	(6,571		)	(45,176		)	12,477
Natural gas liquids derivatives	(12,154		)	(9,212		)	(24,772		)	(6,757		)
Total	$	(9,663	)	$	(22,860	)	$	(96,737	)	$	141,588

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Offsetting of derivative assets and liabilities

As noted above, the Company records the fair value of derivative instruments on a gross basis. The following table presents the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value.

	As of September 30, 2018
	Gross Assets (Liabilities)			Gross Amounts
	Presented in the			Subject to Master			Net
	Consolidated Balance Sheets			Netting Agreements			Amount
	(In thousands)
Derivative assets	$	23,339		$	(17,053	)	$	6,286
Derivative liabilities	$	(77,702	)	$	17,053		$	(60,649	)

	As of December 31, 2017
	Gross Assets (Liabilities)			Gross Amounts
	Presented in the			Subject to Master			Net
	Consolidated Balance Sheets			Netting Agreements			Amount
	(In thousands)
Derivative assets	$	87,532		$	(22,199	)	$	65,333
Derivative liabilities	$	(35,523	)	$	22,199		$	(13,324	)

Concentration of Credit Risk

By using derivative instruments that are not traded on an exchange, the Company is exposed to the credit risk of its counterparties. Credit risk is the risk of loss from counterparties not performing under the terms of the derivative instrument. When the fair value of a derivative instrument is positive, the counterparty is expected to owe the Company, which creates credit risk. To minimize the credit risk in derivative instruments, it is the Company’s policy to enter into derivative contracts only with counterparties that are creditworthy financial institutions deemed by management as competent and competitive market makers. The Company’s derivative contracts are with multiple counterparties to lessen its exposure to any individual counterparty. Additionally, the Company uses master netting agreements to minimize credit risk exposure. The creditworthiness of the Company’s counterparties is subject to periodic review. None of the Company’s derivative instrument contracts contain credit-risk related contingent features. Other than as provided by the Company’s revolving credit facility, the Company is not required to provide credit support or collateral to any of its counterparties under its derivative instruments, nor are the counterparties required to provide credit support to the Company.

11. FAIR VALUE MEASUREMENTS

The Company records certain financial and non-financial assets and liabilities on the balance sheet at fair value in accordance with ASC 820, Fair Value Measurement and Disclosures (“ASC 820”). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The statement establishes market or observable inputs as the preferred sources of values, followed by assumptions based on hypothetical transactions in the absence of market inputs. The statement requires fair value measurements be classified and disclosed in one of the following categories:

Level 1 – Quoted prices in active markets for identical assets and liabilities.

Level 2 – Quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 – Significant inputs to the valuation model are unobservable.

Valuation techniques that maximize the use of observable inputs are favored. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The assessment of the

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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.

The following tables summarize the Company’s financial and non-financial assets and liabilities by ASC 820 valuation level as of September 30, 2018 and December 31, 2017:

	September 30, 2018
	Level 1		Level 2		Level 3
	(In thousands)
Assets:
Derivative Instruments	$	—	$	23,339	$	—
Liabilities:
Derivative Instruments	$	—	$	77,702	$	—

	December 31, 2017
	Level 1		Level 2		Level 3
	(In thousands)
Assets:
Derivative Instruments	$	—	$	87,532	$	—
Liabilities:
Derivative Instruments	$	—	$	35,523	$	—

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 estimated fair values of proved oil and natural gas properties assumed in business combinations are based on a discounted cash flow model and market assumptions as to future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of future development and operating costs, projections of future rates of production, expected recovery rates and risk-adjusted discount rates. The estimated fair values of unevaluated oil and natural gas properties was based on geological studies, historical well performance, location and applicable mineral lease terms. Based on the unobservable nature of certain of the inputs, the estimated fair value of the oil and gas properties assumed is deemed to use Level 3 inputs. The asset retirement obligations assumed as part of the business combination were estimated using the same assumptions and methodology as described below. See Note 1 for further discussion of the Vitruvian Acquisition.

The Company estimates asset retirement obligations pursuant to the provisions of ASC Topic 410, Asset Retirement and Environmental Obligations (“ASC 410”). The 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 2 for further discussion of the Company’s asset retirement obligations. Asset retirement obligations incurred during the nine months ended September 30, 2018 were approximately $1.5 million.

The fair value of the common stock received from Mammoth Energy in connection with the Company’s contribution of all of its membership interests in Sturgeon, Stingray Energy and Stingray Cementing was estimated using Level 1 inputs, as the price per share was a quoted price in an active market for identical Mammoth Energy common shares.

12. FAIR VALUE OF FINANCIAL INSTRUMENTS

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

At September 30, 2018, the carrying value of the outstanding debt represented by the Notes was approximately $2.0 billion, including the unamortized debt issuance cost of approximately $4.6 million related to the 2023 Notes, approximately $9.0 million related to the 2024 Notes, approximately $12.9 million related to the 2025 Notes and approximately $5.2 million related to the 2026 Notes. Based on the quoted market price, the fair value of the Notes was determined to be approximately $2.0 billion at September 30, 2018.

13. REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition

On January 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ("ASC 606") using the modified retrospective transition applied to contracts that were not completed as of that date. The adoption did not result in a material change in the Company’s accounting or have a material effect on the Company’s financial position, including measurement of revenue, the timing of revenue recognition and the recognition of contract assets, liabilities and related costs. For periods through December 31, 2017, the Company accounted for its revenue using ASC 605, Revenue Recognition.

The Company’s revenues are primarily derived from the sale of natural gas, oil and condensate and NGLs. Sales of natural gas, oil and condensate and NGLs 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 a point-in-time once control of the product has been transferred to the customer. The Company considers a variety of facts and circumstances in assessing the point of control transfer, including but not limited to (i) whether the purchaser can direct the use of the product, (ii) the transfer of significant risks, (iii) the Company’s right to payment and (iv) transfer of legal title.

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 is based on pricing tied to market indices and volumes delivered in the current month. As such, this market pricing may be constrained (i.e., not estimable) at the inception of the contract but will be recognized based on the applicable market pricing, which will be known upon transfer of the goods to the customer. The payment date is usually within 30 days of the end of the calendar month in which the commodity is delivered.

The recognition of gains or losses on derivative instruments is outside the scope of ASC 606 and is not considered revenue from contracts with customers subject to ASC 606. The Company may use financial or physical contracts accounted for as derivatives as economic hedges to manage price risk associated with normal sales, or in limited cases may use them for contracts the Company intends to physically settle but do not meet all of the criteria to be treated as normal sales.

The Company has elected to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer, such as sales tax, use tax, value-added tax and similar taxes.

Transaction Price Allocated to Remaining Performance Obligations

A significant number of the Company's product sales are short-term in nature generally through evergreen contracts with contract terms of one year or less. These contracts typically automatically renew under the same provisions. For those contracts, the Company has utilized the practical expedient allowed in the new revenue accounting standard that exempts the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.

For product sales that have a contract term greater than one year, the Company has utilized the practical expedient that exempts the Company from disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these sales contracts, each unit of product generally represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. Currently, the Company's product sales

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that have a contractual term greater than one year have no long-term fixed consideration.

Contract Balances

Receivables from contracts with customers are recorded when the right to consideration becomes unconditional, generally when control of the product has been transferred to the customer. Receivables from contracts with customers were $157.4 million and $146.8 million as of September 30, 2018 and December 31, 2017, respectively, and are reported in accounts receivable - oil and natural gas sales on the consolidated balance sheet. The Company currently has no assets or liabilities related to its revenue contracts, including no upfront or rights to deficiency payments.

Contract Modifications

For contracts modified prior to the beginning of the earliest reporting period presented under ASC 606, the Company has elected to reflect the aggregate of the effect of all modifications that occurred before the beginning of the earliest period presented under the new standard when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price to the satisfied and unsatisfied performance obligations for the modified contracts at transition.

Prior-Period Performance Obligations

The Company records revenue in the month production is delivered to the purchaser. However, settlement statements for certain gas and NGLs sales may be received for 30 to 90 days after the date production is delivered, and as a result, the Company is required to estimate the amount of production that was delivered to the purchaser and the price that will be received for the sale of the product. The differences between the estimates and the actual amounts for product sales is recorded in the month that payment is received from the purchaser. The Company has internal controls in place for the estimation process and any identified differences between revenue estimates and actual revenue received historically have not been significant. For the nine months ended September 30, 2018, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material.

14.    INCOME TAXES

The Company records its quarterly tax provision based on an estimate of the annual effective tax rate expected to apply to continuing operations for the various jurisdictions in which it operates. The tax effects of certain items, such as tax rate changes, significant unusual or infrequent items, and certain changes in the assessment of the realizability of deferred taxes, are recognized as discrete items in the period in which they occur and are excluded from the estimated annual effective tax rate.

For the three and nine months ended September 30, 2018, the Company's estimated annual effective tax rate remained nominal as a result of the full valuation allowance on deferred tax assets. Based on the Company's estimated results for the year ending December 31, 2018, the Company anticipates remaining in a net deferred tax asset position. Based on the available positive and negative evidence, the Company expects to maintain a full valuation allowance as it cannot objectively assert that the deferred tax assets are more likely than not to be realized. A significant piece of negative evidence is the cumulative loss incurred over the three year period ending September 30, 2018. However, given the Company's current earnings and anticipated future earnings, it believes that there is a reasonable possibility that within the next 12 months sufficient positive evidence regarding recent cumulative income may become available, which may allow it to reach a conclusion that a significant portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain net deferred tax assets and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of any potential valuation allowance release is subject to change based on the levels of profitability that the Company is able to actually achieve.

On December 22, 2017, the President of the United States signed into law Public Law No. 115-97, a comprehensive tax reform bill commonly referred to as the Tax Cuts and Jobs Act ("Tax Act") that significantly reformed the Internal Revenue Code of 1986, as amended.  The Tax Act substantially revised numerous areas of U.S. federal income tax law, including reducing the maximum corporate income tax rate from 35% to 21%, allowing for full expensing of certain capital expenditures, modifying the limitations on the utilization of net operating losses, and repealing the corporate alternative minimum tax.  The various estimates included in determining the Company's tax provision as of December 31, 2017 remain provisional through the nine months ended September 30, 2018 and may be adjusted through subsequent events such as the filing of its 2017 consolidated federal income tax return and the issuance of additional guidance from the Internal Revenue Service or from state tax authorities.  There were no material changes to the provisional estimates during the quarter ended September 30, 2018.

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15.     CONDENSED CONSOLIDATING FINANCIAL INFORMATION

On April 21, 2015, the Company issued $350.0 million in aggregate principal amount of the 2023 Notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. In connection with the 2023 Notes Offering, the Company and its subsidiary guarantors entered into a registration rights agreement, dated as of April 21, 2015, pursuant to which the Company agreed to file a registration statement with respect to an offer to exchange the 2023 Notes for a new issue of substantially identical debt securities registered under the Securities Act. The exchange offer for the 2023 Notes was completed on October 13, 2015.

On October 14, 2016, the Company issued $650.0 million in aggregate principal amount of the 2024 Notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The net proceeds from the issuance of the 2024 Notes, together with cash on hand, were used to repurchase or redeem all of the then-outstanding 2020 Notes in October 2016.

On December 21, 2016, the Company issued $600.0 million in aggregate principal amount of the 2025 Notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The Company used the net proceeds from the issuance of the 2025 Notes, together with the net proceeds from the December 2016 underwritten offering of the Company’s common stock and cash on hand, to fund the cash portion of the purchase price for the Vitruvian Acquisition.

In connection with the 2024 Notes and the 2025 Notes Offerings, the Company and its subsidiary guarantors entered into two registration rights agreements, pursuant to which the Company agreed to file a registration statement with respect to offers to exchange the 2024 Notes and the 2025 Notes for new issues of substantially identical debt securities registered under the Securities Act. The exchange offers for the 2024 Notes and the 2025 Notes were completed on September 13, 2017.

On October 11, 2017, the Company issued $450.0 million in aggregate principal amount of the 2026 Notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. A portion of the net proceeds from the issuance of the 2026 Notes was used to repay all of the Company's outstanding borrowings under its secured revolving credit facility on October 11, 2017 and the balance was used to fund the remaining outspend related to the Company's 2017 capital development plans.

In connection with the 2026 Notes offering, the Company and its subsidiary guarantors entered into a registration rights agreement pursuant to which the Company agreed to file a registration statement with respect to an offer to exchange the 2026 Notes for a new issue of substantially identical debt securities registered under the Securities Act. On January 18, 2018, the Company filed a registration statement on Form S-4 with respect to an offer to exchange the 2026 Notes for substantially identical debt securities registered under the Securities Act, which registration statement was declared effective by the SEC on February 12, 2018. The exchange offer relating to the 2026 notes closed on March 22, 2018.

The 2023 Notes, the 2024 Notes, the 2025 Notes and the 2026 Notes are guaranteed on a senior unsecured basis by all existing consolidated subsidiaries that guarantee the Company’s secured revolving credit facility or certain other debt (the “Guarantors”). The 2023 Notes, the 2024 Notes, the 2025 Notes and the 2026 Notes are not guaranteed by Grizzly Holdings, Inc. (the “Non-Guarantor”). The Guarantors are 100% owned by Gulfport (the “Parent”), and the guarantees are full, unconditional, joint and several. There are no significant restrictions on the ability of the Parent or the Guarantors to obtain funds from each other in the form of a dividend or loan.

The following condensed consolidating balance sheets, statements of operations, statements of comprehensive income and statements of cash flows are provided for the Parent, the Guarantors and the Non-Guarantor and include the consolidating adjustments and eliminations necessary to arrive at the information for the Company on a condensed consolidated basis. The information has been presented using the equity method of accounting for the Parent’s ownership of the Guarantors and the Non-Guarantor.

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CONDENSED CONSOLIDATING BALANCE SHEETS

(Amounts in thousands)

	September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	89,214		$	35,357		$	—		$	—		$	124,571
Accounts receivable - oil and natural gas sales	111,463			45,928			—			—			157,391
Accounts receivable - joint interest and other	19,066			20,445			—			—			39,511
Accounts receivable - related parties	79			—			—			—			79
Accounts receivable - intercompany	662,319			240,373			—			(902,692		)	—
Prepaid expenses and other current assets	7,521			2,221			—			—			9,742
Short-term derivative instruments	19,809			—			—			—			19,809
Total current assets	909,471			344,324			—			(902,692		)	351,103
Property and equipment:
Oil and natural gas properties, full-cost accounting	7,003,396			2,934,047			—			(729		)	9,936,714
Other property and equipment	91,637			751			—			—			92,388
Accumulated depletion, depreciation, amortization and impairment	(4,506,267		)	(39		)	—			—			(4,506,306		)
Property and equipment, net	2,588,766			2,934,759			—			(729		)	5,522,796
Other assets:
Equity investments and investments in subsidiaries	2,723,140			—			53,380			(2,543,991		)	232,529
Long-term derivative instruments	3,530			—			—			—			3,530
Inventories	6,800			1,434			—			—			8,234
Other assets	13,018			4,020			—			—			17,038
Total other assets	2,746,488			5,454			53,380			(2,543,991		)	261,331
Total assets	$	6,244,725		$	3,284,537		$	53,380		$	(3,447,412	)	$	6,135,230
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	464,426		$	118,038		$	—		$	—		$	582,464
Accounts payable - intercompany	240,310			662,254			128			(902,692		)	—
Asset retirement obligation - current	120			—			—			—			120
Short-term derivative instruments	62,601			—			—			—			62,601
Current maturities of long-term debt	647			—			—			—			647
Total current liabilities	768,104			780,292			128			(902,692		)	645,832
Long-term derivative instruments	15,101			—			—			—			15,101
Asset retirement obligation - long-term	65,634			12,777			—			—			78,411
Deferred tax liability	3,046			—			—			—			3,046
Long-term debt, net of current maturities	2,100,825			—			—			—			2,100,825
Total liabilities	2,952,710			793,069			128			(902,692		)	2,843,215
Stockholders’ equity:
Common stock	1,732			—			—			—			1,732
Paid-in capital	4,316,006			1,915,598			261,626			(2,177,224		)	4,316,006
Accumulated other comprehensive (loss) income	(46,354		)	—			(44,338		)	44,338			(46,354		)
Retained (deficit) earnings	(979,369		)	575,870			(164,036		)	(411,834		)	(979,369		)
Total stockholders’ equity	3,292,015			2,491,468			53,252			(2,544,720		)	3,292,015
Total liabilities and stockholders’ equity	$	6,244,725		$	3,284,537		$	53,380		$	(3,447,412	)	$	6,135,230

28

CONDENSED CONSOLIDATING BALANCE SHEETS

(Amounts in thousands)

	December 31, 2017
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	67,908		$	31,649		$	—		$	—		$	99,557
Accounts receivable - oil and natural gas sales	112,686			34,087			—			—			146,773
Accounts receivable - joint interest and other	15,435			20,005			—			—			35,440
Accounts receivable - intercompany	554,439			63,374			—			(617,813		)	—
Prepaid expenses and other current assets	4,719			193			—			—			4,912
Short-term derivative instruments	78,847			—			—			—			78,847
Total current assets	834,034			149,308			—			(617,813		)	365,529
Property and equipment:
Oil and natural gas properties, full-cost accounting,	6,562,147			2,607,738			—			(729		)	9,169,156
Other property and equipment	86,711			43			—			—			86,754
Accumulated depletion, depreciation, amortization and impairment	(4,153,696		)	(37		)	—			—			(4,153,733		)
Property and equipment, net	2,495,162			2,607,744			—			(729		)	5,102,177
Other assets:
Equity investments and investments in subsidiaries	2,361,575			77,744			57,641			(2,194,848		)	302,112
Long-term derivative instruments	8,685			—			—			—			8,685
Deferred tax asset	1,208			—			—			—			1,208
Inventories	5,816			2,411			—			—			8,227
Other assets	12,483			7,331			—			—			19,814
Total other assets	2,389,767			87,486			57,641			(2,194,848		)	340,046
Total assets	$	5,718,963		$	2,844,538		$	57,641		$	(2,813,390	)	$	5,807,752
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	416,249		$	137,361		$	—		$	(1	)	$	553,609
Accounts payable - intercompany	63,373			554,313			127			(617,813		)	—
Asset retirement obligation - current	120			—			—			—			120
Short-term derivative instruments	32,534			—			—			—			32,534
Current maturities of long-term debt	622			—			—			—			622
Total current liabilities	512,898			691,674			127			(617,814		)	586,885
Long-term derivative instruments	2,989			—			—			—			2,989
Asset retirement obligation - long-term	63,141			11,839			—			—			74,980
Other non-current liabilities	—			2,963			—			—			2,963
Long-term debt, net of current maturities	2,038,321			—			—			—			2,038,321
Total liabilities	2,617,349			706,476			127			(617,814		)	2,706,138
Stockholders’ equity:
Common stock	1,831			—			—			—			1,831
Paid-in capital	4,416,250			1,915,598			259,307			(2,174,905		)	4,416,250
Accumulated other comprehensive (loss) income	(40,539		)	—			(38,593		)	38,593			(40,539		)
Retained (deficit) earnings	(1,275,928		)	222,464			(163,200		)	(59,264		)	(1,275,928		)
Total stockholders’ equity	3,101,614			2,138,062			57,514			(2,195,576		)	3,101,614
Total liabilities and stockholders’ equity	$	5,718,963		$	2,844,538		$	57,641		$	(2,813,390	)	$	5,807,752

29

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Three months ended September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	235,683		$	125,279		$	—		$	—		$	360,962
Costs and expenses:
Lease operating expenses	16,502			5,823			—			—			22,325
Production taxes	4,505			4,843			—			—			9,348
Midstream gathering and processing	54,397			24,516			—			—			78,913
Depreciation, depletion and amortization	119,914			1			—			—			119,915
General and administrative	16,314			(467		)	1			—			15,848
Accretion expense	812			225			—			—			1,037
	212,444			34,941			1			—			247,386
INCOME (LOSS) FROM OPERATIONS	23,239			90,338			(1		)	—			113,576
OTHER (INCOME) EXPENSE:
Interest expense	34,254			(1,001		)	—			—			33,253
Interest income	(86		)	(6		)	—			—			(92		)
Litigation settlement	917			—			—			—			917
Gain on sale of equity method investments	(2,733		)	—			—			—			(2,733		)
(Income) loss from equity method investments and investments in subsidiaries	(104,226		)	(1		)	275			91,094			(12,858		)
Other income	(37		)	(24		)	—			—			(61		)
	(71,911		)	(1,032		)	275			91,094			18,426
INCOME (LOSS) BEFORE INCOME TAXES	95,150			91,370			(276		)	(91,094		)	95,150
INCOME TAX BENEFIT	—			—			—			—			—
NET INCOME (LOSS)	$	95,150		$	91,370		$	(276	)	$	(91,094	)	$	95,150

30

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Three months ended September 30, 2017
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	188,390		$	77,108		$	—		$	—		$	265,498
Costs and expenses:
Lease operating expenses	16,019			4,001			—			—			20,020
Production taxes	4,052			1,367			—			—			5,419
Midstream gathering and processing	52,725			16,647			—			—			69,372
Depreciation, depletion and amortization	106,649			1			—			—			106,650
General and administrative	13,956			(892		)	1			—			13,065
Accretion expense	335			121			—			—			456
Acquisition expense	(5		)	38			—			—			33
	193,731			21,283			1			—			215,015
(LOSS) INCOME FROM OPERATIONS	(5,341		)	55,825			(1		)	—			50,483
OTHER (INCOME) EXPENSE:
Interest expense	27,914			(784		)	—			—			27,130
Interest income	(29		)	(8		)	—			—			(37		)
(Income) loss from equity method investments and investments in subsidiaries	(53,880		)	128			296			56,193			2,737
Other income	(344		)	(1		)	—			—			(345		)
	(26,339		)	(665		)	296			56,193			29,485
INCOME (LOSS) BEFORE INCOME TAXES	20,998			56,490			(297		)	(56,193		)	20,998
INCOME TAX EXPENSE	2,763			—			—			—			2,763
NET INCOME (LOSS)	$	18,235		$	56,490		$	(297	)	$	(56,193	)	$	18,235

31

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Nine months ended September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	596,018		$	343,076		$	—		$	—		$	939,094
Costs and expenses:
Lease operating expenses	46,926			17,217			—			—			64,143
Production taxes	13,309			10,552			—			—			23,861
Midstream gathering and processing	152,605			61,941			—			—			214,546
Depreciation, depletion, and amortization	352,846			2			—			—			352,848
General and administrative	45,100			(2,148		)	3			—			42,955
Accretion expense	2,397			659			—			—			3,056
	613,183			88,223			3			—			701,409
(LOSS) INCOME FROM OPERATIONS	(17,165		)	254,853			(3		)	—			237,685
OTHER (INCOME) EXPENSE:
Interest expense	103,310			(2,388		)	—			—			100,922
Interest income	(144		)	(18		)	—			—			(162		)
Litigation settlement	917			—			—			—			917
Insurance proceeds	(231		)	—			—			—			(231		)
Gain on sale of equity method investments	(28,349		)	(96,419		)	—			—			(124,768		)
(Income) loss from equity method investments and investments in subsidiaries	(387,991		)	(694		)	833			352,570			(35,282		)
Other (income) expense	(1,167		)	(34		)	—			1,000			(201		)
	(313,655		)	(99,553		)	833			353,570			(58,805		)
INCOME (LOSS) BEFORE INCOME TAXES	296,490			354,406			(836		)	(353,570		)	296,490
INCOME TAX BENEFIT	(69		)	—			—			—			(69		)
NET INCOME (LOSS)	$	296,559		$	354,406		$	(836	)	$	(353,570	)	$	296,559

32

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Nine months ended September 30, 2017
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	710,184		$	212,271		$	—		$	—		$	922,455
Costs and expenses:
Lease operating expenses	49,891			10,153			—			—			60,044
Production taxes	10,799			3,665			—			—			14,464
Midstream gathering and processing	132,740			43,518			—			—			176,258
Depreciation, depletion, and amortization	254,884			3			—			—			254,887
General and administrative	39,882			(1,963		)	3			—			37,922
Accretion expense	908			240			—			—			1,148
Acquisition expense	—			2,391			—			—			2,391
	489,104			58,007			3			—			547,114
INCOME (LOSS) FROM OPERATIONS	221,080			154,264			(3		)	—			375,341
OTHER (INCOME) EXPENSE:
Interest expense	79,095			(4,298		)	—			—			74,797
Interest income	(913		)	(14		)	—			—			(927		)
Gain on sale of equity method investments	(12,523		)	—			—			—			(12,523		)
(Income) loss from equity method investments and investments in subsidiaries	(124,446		)	2,586			869			154,459			33,468
Other (income) expense	(1,522		)	(241		)	—			900			(863		)
	(60,309		)	(1,967		)	869			155,359			93,952
INCOME (LOSS) BEFORE INCOME TAXES	281,389			156,231			(872		)	(155,359		)	281,389
INCOME TAX EXPENSE	2,763			—			—			—			2,763
NET INCOME (LOSS)	$	278,626		$	156,231		$	(872	)	$	(155,359	)	$	278,626

33

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Amounts in thousands)

	Three months ended September 30, 2018
	Parent		Guarantors		Non-Guarantor			Eliminations			Consolidated
Net income (loss)	$	95,150	$	91,370	$	(276	)	$	(91,094	)	$	95,150
Foreign currency translation adjustment	3,052		103		2,949			(3,052		)	3,052
Other comprehensive income (loss)	3,052		103		2,949			(3,052		)	3,052
Comprehensive income (loss)	$	98,202	$	91,473	$	2,673		$	(94,146	)	$	98,202

	Three months ended September 30, 2017
	Parent		Guarantors		Non-Guarantor			Eliminations			Consolidated
Net income (loss)	$	18,235	$	56,490	$	(297	)	$	(56,193	)	$	18,235
Foreign currency translation adjustment	6,832		158		6,674			(6,832		)	6,832
Other comprehensive income (loss)	6,832		158		6,674			(6,832		)	6,832
Comprehensive income (loss)	$	25,067	$	56,648	$	6,377		$	(63,025	)	$	25,067

	Nine months ended September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Net income (loss)	$	296,559		$	354,406		$	(836	)	$	(353,570	)	$	296,559
Foreign currency translation adjustment	(5,815		)	(70		)	(5,745		)	5,815			(5,815		)
Other comprehensive (loss) income	(5,815		)	(70		)	(5,745		)	5,815			(5,815		)
Comprehensive income (loss)	$	290,744		$	354,336		$	(6,581	)	$	(347,755	)	$	290,744

	Nine months ended September 30, 2017
	Parent		Guarantors		Non-Guarantor			Eliminations			Consolidated
Net income (loss)	$	278,626	$	156,231	$	(872	)	$	(155,359	)	$	278,626
Foreign currency translation adjustment	12,719		232		12,487			(12,719		)	12,719
Other comprehensive income (loss)	12,719		232		12,487			(12,719		)	12,719
Comprehensive income (loss)	$	291,345	$	156,463	$	11,615		$	(168,078	)	$	291,345

34

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	Nine months ended September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	416,833		$	192,123		$	(1	)	$	1		$	608,956
Net cash (used in) provided by investing activities	(344,330		)	(188,415		)	(2,318		)	2,318			(532,745		)
Net cash (used in) provided by financing activities	(51,197		)	—			2,319			(2,319		)	(51,197		)
Net increase in cash, cash equivalents and restricted cash	21,306			3,708			—			—			25,014
Cash, cash equivalents and restricted cash at beginning of period	67,908			31,649			—			—			99,557
Cash, cash equivalents and restricted cash at end of period	$	89,214		$	35,357		$	—		$	—		$	124,571

	Nine months ended September 30, 2017
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	310,624		$	181,108		$	(1	)	$	2		$	491,733
Net cash (used in) provided by investing activities	(2,034,554		)	(1,554,063		)	(1,843		)	1,408,980			(2,181,480		)
Net cash provided by (used in) financing activities	354,143			1,407,137			1,845			(1,408,982		)	354,143
Net (decrease) increase in cash, cash equivalents and restricted cash	(1,369,787		)	34,182			1			—			(1,335,604		)
Cash, cash equivalents and restricted cash at beginning of period	1,458,882			1,993			—			—			1,460,875
Cash, cash equivalents and restricted cash at end of period	$	89,095		$	36,175		$	1		$	—		$	125,271

35

16. RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASC 606. ASC 606 supersedes existing industry specific revenue recognition guidance and increases disclosure requirements. The core principle of the new standard is for the recognition of revenue to depict the transfer of goods or services to customers in amounts that reflect the payment to which the company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method applied to contracts that were not completed as of that date. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard. Under the modified retrospective method, the Company recognizes the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings; however, no adjustment was required as a result of adopting the new revenue standard. The comparative information has not been restated and continues to be reported under the historic accounting standards in effect for those periods. The impact of the adoption of the new revenue standard is not expected to be material to the Company’s net income on an ongoing basis.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard supersedes the previous lease guidance by requiring lessees to recognize a right-to-use asset and lease liability on the balance sheet for all leases with lease terms of greater than one year while maintaining substantially similar classifications for financing and operating leases. The guidance is effective for periods after December 15, 2018, and the Company will not early adopt. The Company expects to apply the transition method permitted by ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, issued in August 2018, which permits an entity to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption with no adjustment made to the comparative periods presented in the consolidated financial statements. The Company also expects to utilize the practical expedient provided by ASU 2018-11 to not separate non-lease components from the associated lease component and, instead, to account for those components as a single component if the non-lease components would be accounted for under ASC 606 and other conditions are met.

The Company has identified its portfolio of leased assets under the new standard and is in the process of evaluating the impact of this guidance on its consolidated financial statements and related disclosures. The adoption will increase asset and liability balances on the consolidated balance sheets due to the required recognition of right-of-use assets and corresponding lease liabilities; however, that impact is currently not known. The Company is in the process of designing processes and controls needed to comply with the requirements of the new standard, which includes the implementation of a lease accounting software solution to support lease portfolio management and accounting and disclosures.

Additionally, in January 2018, the FASB issued ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842. The amendments in this update provide an optional expedient to not evaluate existing or expired land easements that were not previously accounted for under current leases guidance in Topic 840. An entity that elects this practical expedient should evaluate new or modified land easements beginning at the date of adoption. The Company does not currently account for any land easements under Topic 840 and plans to utilize this practical expedient in conjunction with the adoption of ASU 2016-02.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this ASU eliminates the probable initial recognition threshold in current GAAP and instead, requires an entity to reflect its current estimate of all expected credit losses. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposure, reinsurance receivables and any other financial assets not excluded from the scope that have the contractual right to receive cash. The guidance is effective for periods after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its financial statements and related disclosures and does not anticipate it to have a material effect.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. This ASU clarifies how certain cash receipts and cash payments should be classified and presented in the statement of cash flows. The Company adopted this standard in the first quarter of 2018 and has made an accounting policy election to classify distributions received from equity method investees using the nature of the distribution approach, which classifies distributions received from investees as either cash inflows from operating activities or cash inflows from investing activities in the statement of cash flows based on the nature of the activities of the investee that generated the distribution. The impact of adopting this ASU was not material to prior periods presented.

36

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU requires that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows and to provide a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet when the cash, cash equivalents, restricted cash, and restricted cash equivalents are presented in more than one line item on the balance sheet. The Company adopted this standard in the first quarter of 2018 using the retrospective transition method. The adoption of this standard had no impact on the statement of cash flows for the nine months ended September 30, 2018 and resulted in the addition of $185.0 million of restricted cash to the beginning cash balance and an increase to net cash used in investing activities by the same amount on the statement of cash flows for the nine months ended September 30, 2017.

In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business. Under the current business combination guidance, there are three elements of a business: inputs, processes and outputs. The revised guidance adds an initial screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets. If that screen is met, the set of assets is not a business. The new framework also specifies the minimum required inputs and processes necessary to be a business. The Company adopted this standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures.

In February 2018, the FASB issued ASU No. 2018-02, Income statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for standard tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendment will be effective for reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently assessing the impact of the ASU on its consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurementwhich removes, modifies, and adds certain disclosure requirements on fair value measurements. The amendment will be effective for reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is currently assessing the impact of the ASU on its consolidated financial statements and related disclosures.

In August 2018, the FASB also issued ASU No. 2018-15 , Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for costs associated with implementing a cloud computing arrangement in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software. The amendment will be effective for reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is currently assessing the impact of the ASU on its consolidated financial statements and related disclosures.

17. SUBSEQUENT EVENTS

At September 30, 2018, accounts receivable-related parties totaled $79,000 and represented personal charges made by the former chief executive officer of the Company on his Company credit card.  These charges were paid in full in October 2018 and no personal charges are currently outstanding.

37

ITEM 2. MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion and analysis should be read in conjunction with the “Management’s Discussion and Analysis of Financial Condition and Results of Operations” section and audited consolidated financial statements and related notes included in our Annual Report on Form 10-K and with the unaudited consolidated financial statements and related notes thereto presented in this Quarterly Report on Form 10-Q.

Disclosure Regarding Forward-Looking Statements

This report includes “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, or the Securities Act, and Section 21E of the Securities Exchange Act of 1934, as amended, or the Exchange Act. All statements other than statements of historical facts included in this report that address activities, events or developments that we expect or anticipate will or may occur in the future, including such things as estimated future net revenues from oil and natural gas reserves and the present value thereof, future capital expenditures (including the amount and nature thereof), business strategy and measures to implement strategy, competitive strength, goals, expansion and growth of our business and operations, plans, 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 analysis made by us in light of our experience and our perception of historical trends, current conditions and expected future developments as well as other factors we believe are appropriate in the circumstances. However, whether actual results and developments will conform with our expectations and predictions is subject to a number of risks and uncertainties, general economic, market or business conditions; the opportunities (or lack thereof) that may be presented to and pursued by us; competitive actions by other oil and natural gas companies; our ability to identify, complete and integrate acquisitions of properties and businesses; changes in laws or regulations; adverse weather conditions and natural disasters such as hurricanes and other factors, including those listed in the “Risk Factors” section of our most recent Annual Report on Form 10-K, Quarterly Reports on Form 10-Q or any other filings we make with the SEC, many of which are beyond our control. Consequently, all of the forward-looking statements made in this report are qualified by these cautionary statements, and we cannot assure you that the actual results or developments anticipated by us will be realized or, even if realized, that they will have the expected consequences to or effects on us, our business or operations. We have no intention, and disclaim any obligation, to update or revise any forward-looking statements, whether as a result of new information, future results or otherwise.

Overview

We are an independent oil and natural gas exploration and production company focused on the exploration, exploitation, acquisition and production of natural gas, crude oil and natural gas liquids in the United States. Our corporate strategy is to internally identify prospects, acquire lands encompassing those prospects and evaluate those prospects using subsurface geology and geophysical data and exploratory drilling. Using this strategy, we have developed an oil and natural gas portfolio of proved reserves, as well as development and exploratory drilling opportunities on high potential conventional and unconventional oil and natural gas prospects. Our principal properties are located in the Utica Shale primarily in Eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in Oklahoma. In addition, among other interests, we hold an acreage position along the Louisiana Gulf Coast in the West Cote Blanche Bay, or WCBB, and Hackberry fields, an acreage position in the Alberta oil sands in Canada through our interest in Grizzly Oil Sands ULC, or Grizzly, and an approximate 22.0% equity interest in Mammoth Energy Services, Inc., or Mammoth Energy, an energy services company listed on the Nasdaq Global Select Market (TUSK). We seek to achieve reserve growth and increase our cash flow through our annual drilling programs.

2018 Operational and Other Highlights

• Production increased 31% to 368,366 net million cubic feet of natural gas equivalent, or MMcfe, for the nine months ended September 30, 2018 from 281,318 MMcfe for the nine months ended September 30, 2017. Our net daily production for the nine months ended September 30, 2018 averaged 1,349.3 MMcfe per day and was comprised of approximately 89% natural gas, 8% natural gas liquids, or NGLs, and 3% oil.

• During the nine months ended September 30, 2018, we spud 23 gross (19.6 net) wells in the Utica Shale, participated in an additional 28 gross (6.9 net) wells that were drilled by other operators on our Utica Shale acreage and recompleted 47 gross and net wells on our Louisiana acreage. In addition, during the nine months ended September 30, 2018, we spud 12 gross (11.0 net) wells in the SCOOP and participated in an additional 33 gross (3.0net) wells that were drilled by other operators on our SCOOP acreage. Of the35new wells we spud, at September 30, 2018, 32 were in various stages of completion and three were being drilled. In addition,28gross and net operated wells and 29

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gross (9.1 net) non-operated wells were turned-to-sales in our Utica Shale operating area and 15 gross (12.6 net) operated wells and 29 gross (0.9 net) non-operated wells were turned-to-sales in our SCOOP operating area during the nine months ended September 30, 2018.

• During the nine months endedSeptember 30, 2018, we reduced our unit lease operating expense by 19% to $0.17 per Mcfe from $0.21 per Mcfe during the nine months endedSeptember 30, 2017.

• During the nine months endedSeptember 30, 2018, we decreased our unit general and administrative expense by 8% to $0.12 per Mcfe from $0.13 per Mcfe during the nine months endedSeptember 30, 2017.

• During the nine months endedSeptember 30, 2018, we decreased our unit midstream gathering and processing expense by 8% per Mcfe to $0.58 per Mcfe from $0.63 per Mcfe during the nine months endedSeptember 30, 2017.

• In January 2018, our board of directors approved a stock repurchase program to acquire up to $100.0 million of our outstanding common stock, and in May 2018 expanded this program to acquire up to an additional $100.0 million of our common stock, during 2018 for a total of up to $200.0 million, which we believe underscores the confidence we have in our business model, financial performance and asset base. During the nine months endedSeptember 30, 2018, we purchased 10.5 million shares of our outstanding common stock for a total of approximately $110.0 million.

• On May 1, 2018, we sold our 25% equity interest in Strike Force Midstream LLC, or Strike Force, to EQT Midstream Partners, LP for $175.0 million in cash.

• On June 29, 2018, we sold 1,235,600 shares, and on July 30, 2018, we sold an additional 118,974 shares, of our Mammoth Energy common stock in an underwritten public offering and related partial exercise of the underwriters' option to purchase additional shares for net proceeds to us of approximately $47.0 million and $4.5 million, respectively. Following the sale of these shares, we owned 9,829,548 shares, or approximately 22.0%, of Mammoth Energy’s outstanding common stock.

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2018 Production and Drilling Activity

During the three months ended September 30, 2018, our total net production was116,993,594thousand cubic feet, or Mcf, of natural gas,664,633barrels of oil and72,427,030gallons of NGLs for a total of131,328MMcfe, as compared to 97,824,927 Mcf of natural gas, 685,316 barrels of oil and 59,007,909 gallons of NGLs, or 110,367 MMcfe, for the three months ended September 30, 2017. Our total net production averaged approximately1,427.5MMcfe per day during the three months endedSeptember 30, 2018, as compared to1,199.6MMcfe per day during the same period in2017. The 19%increase in production is largely the result of the continuing development of our Utica Shale acreage and the development of our SCOOP acreage.

Utica Shale. From January 1, 2018 through September 30, 2018, we spud 23 gross (19.6 net) wells in the Utica Shale, of which 22 were in various stages of completion and one was being drilled at September 30, 2018. We also participated in an additional 28 gross (6.9 net) wells that were drilled by other operators on our Utica Shale acreage. From October 1, 2018 through October 26, 2018, we did not spud any new wells in the Utica Shale.

As of October 26, 2018, we had completed our 2018 drilling activity in the Utica Shale and we do not have any rigs running in the play. We intend to commence sales from a total of 35 gross and net wells on our Utica Shale acreage in 2018.

Aggregate net production from our Utica Shale acreage during the three months ended September 30, 2018 was approximately 104,975 MMcfe, or an average of 1,141.0 MMcfe per day, of which 96% was from natural gas and 4% was from oil and NGLs.

SCOOP. From January 1, 2018 through September 30, 2018, we spud 12 gross (11.0 net) wells in the SCOOP, of which two were being drilled and ten were in various stages of completion at September 30, 2018. We also participated in an additional 33 gross (3.0 net) wells that were drilled by other operators on our SCOOP acreage. From October 1, 2018 through October 26, 2018, we spud one gross and net well.

As of October 26, 2018, we had two operated horizontal rigs running on our SCOOP acreage. We currently expect to spud a total of 15 gross (13 net) horizontal wells during 2018 and have concluded our completion activity for the year with a total of 15 gross (12 net) wells turned to sales on our SCOOP acreage during 2018.

Aggregate net production from our SCOOP acreage during the three months ended September 30, 2018 was approximately 25,259 MMcfe, or an average of 274.6 MMcfe per day, of which 66% was from natural gas and 34% was from oil and NGLs.

WCBB. From January 1, 2018 through October 26, 2018, we did not spud any new wells and recompleted 32 wells. Aggregate net production from the WCBB field during the three months ended September 30, 2018 was approximately 841 MMcfe, or an average of 9.1 MMcfe per day, of which 99% was from oil and 1% was from natural gas.

East Hackberry Field. From January 1, 2018 through October 26, 2018, we did not spud any new wells and recompleted 15 wells. Aggregate net production from the East Hackberry field during the three months ended September 30, 2018 was approximately 147 MMcfe, or an average of 1.6 MMcfe per day, all of which was from oil.

West Hackberry Field. From January 1, 2018 through October 26, 2018, we did not spud any wells in our West Hackberry field. Aggregate net production from the West Hackberry field during the three months ended September 30, 2018 was approximately 21.2 MMcfe, or an average of 230.7 Mcfe per day, all of which was from oil.

We currently intend to perform only recompletion activities on our acreage in Southern Louisiana in 2018.

Niobrara Formation. From January 1, 2018 through October 26, 2018, there were no wells spud on our Niobrara Formation acreage. Aggregate net production was approximately 22.4 MMcfe, or an average of 243.4 Mcfe per day during the three months ended September 30, 2018, all of which was from oil.

Bakken. As of September 30, 2018, we had an interest in 18 wells and overriding royalty interests in certain existing and future wells. Aggregate net production from this acreage during the three months ended September 30, 2018 was approximately 60.5 MMcfe, or an average of 657.5 Mcfe per day, of which 80% was from oil, 13% was from natural gas and 7% was from NGLs.

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2018 Update Regarding Our Equity Investments

Mammoth Energy Services, Inc.

On June 29, 2018, we sold 1,235,600 shares, and on July 30, 2018, we sold an additional 118,974 shares, of our Mammoth Energy common stock in an underwritten public offering and related partial exercise of the underwriters' option to purchase additional shares for net proceeds to us of approximately $47.0 million and $4.5 million, respectively. Following the sale of these shares, we owned 9,829,548 shares, or approximately 22.0%, of Mammoth Energy’s outstanding common stock.

Strike Force Midstream LLC

On May 1, 2018, we sold our 25% interest in Strike Force to EQT Midstream Partners, LP for proceeds of $175.0 million in cash.

Critical Accounting Policies and Estimates

Our discussion and analysis of our financial condition and results of operations are based upon consolidated financial statements, which have been prepared in accordance with accounting principles generally accepted in the United States of America, or GAAP. The preparation of these consolidated financial statements requires us to make estimates and judgments that affect the reported amounts of assets, liabilities, revenues and expenses. We have identified certain of these policies as being of particular importance to the portrayal of our financial position and results of operations and which require the application of significant judgment by our management. We analyze our estimates including those related to oil and natural gas properties, revenue recognition, income taxes and commitments and contingencies, and base our estimates on historical experience and various other assumptions that we believe to be reasonable under the circumstances. Actual results may differ from these estimates under different assumptions or conditions. We believe the following critical accounting policies affect our more significant judgments and estimates used in the preparation of our consolidated financial statements:

Oil and Natural Gas Properties. We use the full cost method of accounting for oil and natural gas operations. Accordingly, all costs, including non-productive costs and certain general and administrative costs directly associated with acquisition, exploration and development of oil and natural gas properties, are capitalized. Companies that use the full cost method of accounting for oil and gas properties are required to perform a ceiling test each quarter. The test determines a limit, or ceiling, on the book value of the oil and gas properties. Net capitalized costs are limited to the lower of unamortized cost net of deferred income taxes or the cost center ceiling. The cost center ceiling is defined as the sum of (a) estimated future net revenues, discounted at 10% per annum, from proved reserves, based on the 12-month unweighted average of the first-day-of-the-month price for the prior twelve months, adjusted for any contract provisions or financial derivatives, if any, that hedge our oil and natural gas revenue, and excluding the estimated abandonment costs for properties with asset retirement obligations recorded on the balance sheet, (b) the cost of properties not being amortized, if any, and (c) the lower of cost or market value of unproved properties included in the cost being amortized, including related deferred taxes for differences between the book and tax basis of the oil and natural gas properties. If the net book value, including related deferred taxes, exceeds the ceiling, an impairment or noncash writedown is required. Such capitalized costs, including the estimated future development costs and site remediation costs of proved undeveloped properties are depleted by an equivalent units-of-production method, converting gas to barrels at the ratio of six Mcf of gas to one barrel of oil. No gain or loss is recognized upon the disposal of oil and natural gas properties, unless such dispositions significantly alter the relationship between capitalized costs and proven oil and natural gas reserves. Oil and natural gas properties not subject to amortization consist of the cost of undeveloped leaseholds and totaled approximately $2.9 billion at September 30, 2018 and $2.9 billion at December 31, 2017. These costs are reviewed quarterly by management for impairment, with the impairment provision included in the cost of oil and natural gas properties subject to amortization. Factors considered by management in its impairment assessment include our drilling results and those of other operators, the terms of oil and natural gas leases not held by production and available funds for exploration and development.

Ceiling Test. Companies that use the full cost method of accounting for oil and gas properties are required to perform a ceiling test each quarter. The test determines a limit, or ceiling, on the book value of the oil and gas properties. Net capitalized costs are limited to the lower of unamortized cost net of deferred income taxes or the cost center ceiling (as defined in the preceding paragraph). If the net book value, including related deferred taxes, exceeds the ceiling, an impairment or noncash writedown is required. Ceiling test impairment can give us a significant loss for a particular period; however, future depletion expense would be reduced. A decline in oil and gas prices may result in an impairment of oil and gas properties. For instance, as a result of the decline in commodity prices in 2015 and 2016 and subsequent reduction in our proved reserves, we recognized a ceiling test impairment of $715.5 million for the year ended December 31, 2016. At September 30, 2018, the calculated

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ceiling was greater than the net book value of our oil and natural gas properties, thus no ceiling test impairment was requiredfor the nine months endedSeptember 30, 2018. If prices of oil, natural gas and natural gas liquids decline in the future, we may be required to further write down the value of our oil and natural gas properties, which could negatively affect our results of operations.

Asset Retirement Obligations. We have obligations to remove equipment and restore land at the end of oil and gas production operations. Our removal and restoration obligations are primarily associated with plugging and abandoning wells and associated production facilities.

We account for abandonment and restoration liabilities under ASC 410 which requires us to record a liability equal to the fair value of the estimated cost to retire an asset. The asset retirement liability is recorded in the period in which the obligation meets the definition of a liability, which is generally when the asset is placed into service. When the liability is initially recorded, we increase the carrying amount of the related long-lived asset by an amount equal to the original liability. The liability is accreted to its present value each period, and the capitalized cost is depreciated over the useful life of the related long-lived asset. Upon settlement of the liability or the sale of the well, the liability is reversed. These liability amounts may change because of changes in asset lives, estimated costs of abandonment or legal or statutory remediation requirements.

The fair value of the liability associated with these retirement obligations is determined using significant assumptions, including current estimates of the plugging and abandonment or retirement, annual inflation of these costs, the productive life of the asset and our risk adjusted cost to settle such obligations discounted using our credit adjusted risk free interest rate. Changes in any of these assumptions can result in significant revisions to the estimated asset retirement obligation. Revisions to the asset retirement obligation are recorded with an offsetting change to the carrying amount of the related long-lived asset, resulting in prospective changes to depreciation, depletion and amortization expense and accretion of discount. Because of the subjectivity of assumptions and the relatively long life of most of our oil and natural gas assets, the costs to ultimately retire these assets may vary significantly from previous estimates.

Oil and Gas Reserve Quantities. Our estimate of proved reserves is based on the quantities of oil and natural gas that engineering and geological analysis demonstrate, with reasonable certainty, to be recoverable from established reservoirs in the future under current operating and economic parameters. Netherland, Sewell & Associates, Inc. and to a lesser extent our personnel have prepared reserve reports of our reserve estimates at December 31, 2017 on a well-by-well basis for our properties.

Reserves and their relation to estimated future net cash flows impact our depletion and impairment calculations. As a result, adjustments to depletion and impairment are made concurrently with changes to reserve estimates. Our reserve estimates and the projected cash flows derived from these reserve estimates have been prepared in accordance with the guidelines of the Securities and Exchange Commission, or SEC. The accuracy of our reserve estimates is a function of many factors including the following:

• the quality and quantity of available data;

• the interpretation of that data;

• the accuracy of various mandated economic assumptions; and

• the judgments of the individuals preparing the estimates.

Our proved reserve estimates are a function of many assumptions, all of which could deviate significantly from actual results. Therefore, reserve estimates may materially vary from the ultimate quantities of oil and natural gas eventually recovered.

Income Taxes. We use the asset and liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences of (1) temporary differences between the financial statement carrying amounts and the tax basis of existing assets and liabilities and (2) operating loss and tax credit carryforwards. Deferred income tax assets and liabilities are based on enacted tax rates applicable to the future period when those temporary differences are expected to be recovered or settled. The effect of a change in tax rates on deferred tax assets and liabilities is recognized in income during the period the rate change is enacted. Deferred tax assets are recognized in the year in which realization becomes determinable. Quarterly, management performs a forecast of its taxable income to determine whether it is more likely than not that a valuation allowance is needed, looking at both positive and negative factors. A valuation allowance for our

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deferred tax assets is established, if in management’s opinion, it is more likely than not that some portion will not be realized. At September 30, 2018, a valuation allowance of $236.1 million had been provided against the net deferred tax asset.

Revenue Recognition. We derive almost all of our revenue from the sale of crude oil and natural gas produced from our oil and natural gas properties. Revenue is recorded in the month the product is delivered to the purchaser. We receive payment on substantially all of these sales from one to three months after delivery. At the end of each month, we estimate the amount of production delivered to purchasers that month and the price we will receive. Variances between our estimated revenue and actual payment received for all prior months are recorded at the end of the quarter after payment is received. Historically, our actual payments have not significantly deviated from our accruals.

Investments—Equity Method. Investments in entities greater than 20% and less than 50% and/or investments in which we have significant influence are accounted for under the equity method. Under the equity method, our share of investees’ earnings or loss is recognized in the statement of operations.

We review our investments to determine if a loss in value which is other than a temporary decline has occurred. If such loss has occurred, we recognize an impairment provision.

Commitments and Contingencies. Liabilities for loss contingencies arising from claims, assessments, litigation or other sources are recorded when it is probable that a liability has been incurred and the amount can be reasonably estimated. We are involved in certain litigation for which the outcome is uncertain. Changes in the certainty and the ability to reasonably estimate a loss amount, if any, may result in the recognition and subsequent payment of legal liabilities.

Derivative Instruments and Hedging Activities. We seek to reduce our exposure to unfavorable changes in oil, natural gas and natural gas liquids prices, which are subject to significant and often volatile fluctuation, by entering into over-the-counter fixed price swaps, basis swaps and various types of option contracts. We follow the provisions of ASC 815, Derivatives and Hedging, as amended. It requires that all derivative instruments be recognized as assets or liabilities in the balance sheet, measured at fair value. We estimate the fair value of all derivative instruments using industry-standard models that considered various assumptions including current market and contractual prices for the underlying instruments, implied volatility, time value and nonperformance risk, as well as other relevant economic measures.

The accounting for changes in the fair value of a derivative instrument depends on the intended use of the derivative and the resulting designation. Our current commodity derivative instruments are not designated as hedges for accounting purposes. Accordingly, the changes in fair value are recognized in the consolidated statements of operations in the period of change. Gains and losses on derivatives are included in cash flows from operating activities.

See Item 3. “Quantitative and Qualitative Disclosures About Market Risk” for a summary of our derivative instruments in place as of September 30, 2018.

RESULTS OF OPERATIONS

Comparison of the Three Months Ended September 30,2018 and 2017

We reported net income of $95.2 million for the three months ended September 30, 2018 as compared to net income of $18.2 million for the three months ended September 30, 2017. This $77.0 million period-to-period increase was due primarily to a $95.5 million increase in natural gas, oil and NGL revenues, a $15.6 million increase in income from equity method investments and a $2.7 million increase in gain on sale of equity investments, partially offset by a $9.5 millionincrease in midstream gathering and processing expenses, a $6.1 millionincrease in interest expense and a $13.3 million increase in depreciation, depletion and amortization for the three months ended September 30, 2018 as compared to the three months ended September 30, 2017. The gain on sale of equity investments in 2018 is a result of our sale of Mammoth Energy common stock during the three months ended September 30, 2018.

Oil and Gas Revenues. For the three months ended September 30, 2018, we reported natural gas, oil and NGL revenues of $361.0 million as compared to oil and natural gas revenues of $265.5 million during the same period in 2017. This $95.5 million, or 36%, increase in revenues was primarily attributable to the following:

• A $13.3 million increase in natural gas, oil and NGL sales due to a favorable change in gains and losses from derivative instruments. Of the total change, $32.9 million was due to favorable changes in the fair value of our open derivative positions in each period, partially offset by a $19.6 million unfavorable change in settlements related to our

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derivative positions. The favorable change in fair value of our open derivative positions is primarily a result of the decrease in the forward curve prices for natural gas from the previous reporting period.

• A $47.8 millionincrease in natural gas sales without the impact of derivatives due to a 20%increase in natural gas sales volumes and a 2% increase in natural gas market prices.

• A $14.2 millionincrease in oil and condensate sales without the impact of derivatives due to a 50% increase in oil and condensate market prices, partially offset by a 3%decrease in oil and condensate sales volumes.

• A $20.2 millionincrease in natural gas liquids sales without the impact of derivatives due to a 30% increase in natural gas liquids market prices and a 23%increase in natural gas liquids sales volumes.

The following table summarizes our oil and natural gas production and related pricing for the three months ended September 30, 2018, as compared to such data for the three months ended September 30, 2017:

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	Three months ended September 30,
	2018			2017
	($ In thousands)
Natural gas sales
Natural gas production volumes (MMcf)	116,994			97,825
Total natural gas sales	$	271,167		$	223,340
Natural gas sales without the impact of derivatives ($/Mcf)	$	2.32		$	2.28
Impact from settled derivatives ($/Mcf)	$	0.08		$	0.13
Average natural gas sales price, including settled derivatives ($/Mcf)	$	2.40		$	2.41
Oil and condensate sales
Oil and condensate production volumes (MBbls)	665			685
Total oil and condensate sales	$	45,682		$	31,459
Oil and condensate sales without the impact of derivatives ($/Bbl)	$	68.73		$	45.90
Impact from settled derivatives ($/Bbl)	$	(14.76	)	$	4.36
Average oil and condensate sales price, including settled derivatives ($/Bbl)	$	53.97		$	50.26
Natural gas liquids sales
Natural gas liquids production volumes (MGal)	72,427			59,008
Total natural gas liquids sales	$	53,776		$	33,559
Natural gas liquids sales without the impact of derivatives ($/Gal)	$	0.74		$	0.57
Impact from settled derivatives ($/Gal)	$	(0.07	)	$	(0.03	)
Average natural gas liquids sales price, including settled derivatives ($/Gal)	$	0.67		$	0.54
Natural gas, oil and condensate and natural gas liquids sales
Natural gas equivalents (MMcfe)	131,328			110,367
Total natural gas, oil and condensate and natural gas liquids sales	$	370,625		$	288,358
Natural gas, oil and condensate and natural gas liquids sales without the impact of derivatives ($/Mcfe)	$	2.82		$	2.61
Impact from settled derivatives ($/Mcfe)	$	(0.04	)	$	0.13
Average natural gas, oil and condensate and natural gas liquids sales price, including settled derivatives ($/Mcfe)	$	2.78		$	2.74
Production Costs:
Average production costs (per Mcfe)	$	0.17		$	0.18
Average production taxes and midstream costs (per Mcfe)	$	0.67		$	0.68
Total production and midstream costs and production taxes (per Mcfe)	$	0.84		$	0.86

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Lease Operating Expenses. Lease operating expenses, or LOE, not including production taxes increased to $22.3 million for the three months ended September 30, 2018 from $20.0 million for the three months ended September 30, 2017. This $2.3 millionincrease was primarily the result of an increase in expenses related to water hauling and disposal and field telemetry, partially offset by a decrease in location and facility repairs and maintenance, surface rentals, compression and contract labor and field supervision. In addition, due to increased efficiencies and a 19%increase in our production volumes for the three months ended September 30, 2018 as compared to the three months ended September 30, 2017, our per unit LOE decreased by 6% from $0.18 per Mcfe to $0.17 per Mcfe.

Production Taxes. Production taxes increased $3.9 million to $9.3 million for the three months ended September 30, 2018 from $5.4 million for the three months ended September 30, 2017. This increase was related to an increase in production volumes.

Midstream Gathering and Processing Expenses. Midstream gathering and processing expenses increased $9.5 million to $78.9 million for the three months ended September 30, 2018 from $69.4 million for the same period in 2017. This increase was primarily attributable to midstream expenses related to our increased production volumes in the Utica Shale and SCOOP resulting from our 2017 and 2018 drilling activities.

Depreciation, Depletion and Amortization. Depreciation, depletion and amortization, or DD&A, expense increased to$119.9 million for the three months ended September 30, 2018, and consisted of $117.3 million in depletion of oil and natural gas properties and $2.6 million in depreciation of other property and equipment, as compared to total DD&A expense of $106.7 million for the three months ended September 30, 2017. This increase was due to an increase in our full cost pool and an increase in our production, partially offset by an increase in our total proved reserves volume used to calculate our total DD&A expense.

General and Administrative Expenses. Net general and administrative expenses increased to $15.8 million for the three months ended September 30, 2018 from $13.1 million for the three months ended September 30, 2017. This $2.7 millionincrease was due to increases in salaries and benefits, employee stock compensation, computer expense and legal fees, partially offset by a decrease in consulting fees.

Interest Expense. Interest expense increased to $33.3 million for the three months ended September 30, 2018 from $27.1 million for the three months ended September 30, 2017 due primarily to the issuance of $450.0 million in aggregate principal amount of our 6.375% Senior Notes due 2026, or the 2026 Notes, in October 2017. In addition, total weighted average debt outstanding under our revolving credit facility was $74.0 million for the three months ended September 30, 2018 as compared to $273.7 million debt outstanding under such facility for the same period in 2017. As of September 30, 2018, amounts borrowed under our revolving credit facility bore interest at the Eurodollar rate which resulted in a weighted average rate of 3.72%. In addition, we capitalized approximately $1.6 million and $2.1 million in interest expense to undeveloped oil and natural gas properties during the three months ended September 30, 2018 and 2017, respectively. This decrease in capitalized interest in the 2018 period was primarily the result of changes to our development plan for our oil and natural gas properties.

Income Taxes. As of September 30, 2018, we had a federal net operating loss carryforward of approximately $312.2 million from prior years, in addition to numerous temporary differences, which gave rise to a net deferred tax asset. Quarterly, management performs a forecast of our taxable income to determine whether it is more likely than not that a valuation allowance is needed, looking at both positive and negative factors. A valuation allowance for our deferred tax assets is established if, in management’s opinion, it is more likely than not that some portion will not be realized. At September 30, 2018, a valuation allowance of $236.1 million had been provided against the net deferred tax assets. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act. Further information on the tax impacts of the Tax Cuts and Jobs Act is included in Note 14 of our consolidated financial statements.

Comparison of the Nine Months EndedSeptember 30,2018 and 2017

We reported net income of $296.6 million for the nine months ended September 30, 2018 as compared to net income of $278.6 million for the nine months ended September 30, 2017. This $18.0 million period-to-period increase was due primarily to an increase in income from equity method investments of $68.8 million, a $112.2 million increase in gain on sale of equity investments and a $16.6 millionincrease in natural gas, oil and NGL revenues, partially offset by a $38.2 millionincrease in midstream gathering and processing expenses, a $26.1 millionincrease in interest expense, a $98.0 million increase in depreciation, depletion and amortization and a $9.4 million increase in production taxes for the nine months endedSeptember 30, 2018 as compared to the nine months endedSeptember 30, 2017. The gain on sale of equity investments in 2018 is a result of our sale of our interest in Strike Force and sale of Mammoth Energy common stock during 2018.

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Oil and Gas Revenues. For the nine months ended September 30, 2018, we reported oil and natural gas revenues of $939.1 million as compared to oil and natural gas revenues of $922.5 million during the same period in 2017. This $16.6 million, or2%, increase in revenues was primarily attributable to the following:

• A $238.3 million decrease in natural gas, oil and NGL sales due to an unfavorable change in gains and losses from derivative instruments. Of the total change, $236.0 million was due to unfavorable changes in the fair value of our open derivative positions in each period. In addition, $2.3 million of this decrease was due to an unfavorable change in settlements related to our derivative positions. The loss from changes in fair value of our open derivative positions is primarily the result of the increase in the forward curve prices for natural gas, oil and NGLs from the previous reporting period.

• A $146.7 millionincrease in natural gas sales without the impact of derivatives due to a 32%increase in natural gas sales volumes, partially offset by a 6% decrease in natural gas market prices.

• A $55.3 millionincrease in oil and condensate sales without the impact of derivatives due to a 41% increase in oil and condensate market prices and a 17%increase in oil and condensate sales volumes.

• A $52.9 millionincrease in natural gas liquid sales without the impact of derivatives due to a 32% increase in natural gas liquids market prices and a 21%increase in natural gas liquids sales volumes.

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The following table summarizes our oil and natural gas production and related pricing for the nine months ended September 30, 2018, as compared to such data for the nine months ended September 30, 2017:

	Nine months ended September 30,
	2018			2017
	($ In thousands)
Natural gas sales
Natural gas production volumes (MMcf)	327,272			247,012
Total natural gas sales	$	753,261		$	606,544
Natural gas sales without the impact of derivatives ($/Mcf)	$	2.30		$	2.46
Impact from settled derivatives ($/Mcf)	$	0.14		$	0.03
Average natural gas sales price, including settled derivatives ($/Mcf)	$	2.44		$	2.49
Oil and condensate sales
Oil and condensate production volumes (MBbls)	2,166			1,849
Total oil and condensate sales	$	140,687		$	85,338
Oil and condensate sales without the impact of derivatives ($/Bbl)	$	64.96		$	46.15
Impact from settled derivatives ($/Bbl)	$	(10.28	)	$	2.92
Average oil and condensate sales price, including settled derivatives ($/Bbl)	$	54.68		$	49.07
Natural gas liquids sales
Natural gas liquids production volumes (MGal)	196,695			162,483
Total natural gas liquids sales	$	141,883		$	88,985
Natural gas liquids sales without the impact of derivatives ($/Gal)	$	0.72		$	0.55
Impact from settled derivatives ($/Gal)	$	(0.06	)	$	(0.01	)
Average natural gas liquids sales price, including settled derivatives ($/Gal)	$	0.66		$	0.54
Natural gas, oil and condensate and natural gas liquids sales
Gas equivalents (MMcfe)	368,366			281,318
Total natural gas, oil and condensate and natural gas liquids sales	$	1,035,831		$	780,867
Natural gas, oil and condensate and natural gas liquids sales without the impact of derivatives ($/Mcfe)	$	2.81		$	2.78
Impact from settled derivatives ($/Mcfe)	$	0.03		$	0.04
Average natural gas, oil and condensate and natural gas liquids sales price, including settled derivatives ($/Mcfe)	$	2.84		$	2.82
Production Costs:
Average production costs (per Mcfe)	$	0.17		$	0.21
Average production taxes and midstream costs (per Mcfe)	$	0.65		$	0.68
Total production and midstream costs and production taxes (per Mcfe)	$	0.82		$	0.89

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Lease Operating Expenses. Lease operating expenses, or LOE, not including production taxes increased to $64.1 million for the nine months ended September 30, 2018 from $60.0 million for the nine months ended September 30, 2017. This increase was mainly the result of an increase in expenses related to field supervision, overhead and water hauling and disposal, partially offset by a decrease in location repairs and maintenance, surface rentals, contract labor and compressors. However, due to increased efficiencies and a 31%increase in our production volumes for the nine months ended September 30, 2018 as compared to the nine months ended September 30, 2017, our per unit LOE decreased by 19% from $0.21 per Mcfe to $0.17 per Mcfe.

Production Taxes. Production taxes increased $9.4 million to $23.9 million for the nine months ended September 30, 2018 from $14.5 million for the same period in 2017. This increase was primarily related to an increase in production volumes, as well as changes in our product mix and production location.

Midstream Gathering and Processing Expenses. Midstream gathering and processing expenses increased by $38.2 millionto $214.5 million for the nine months ended September 30, 2018 from $176.3 million for the same period in 2017. This increase was primarily attributable to midstream expenses related to our increased production volumes in the Utica Shale and SCOOP resulting from our 2017 and 2018 drilling activities.

Depreciation, Depletion and Amortization. Depreciation, depletion and amortization, or DD&A, expense increased to $352.8 million for the nine months ended September 30, 2018, and consisted of $345.1 million in depletion of oil and natural gas properties and $7.7 million in depreciation of other property and equipment, as compared to total DD&A expense of $254.9 million for the nine months ended September 30, 2017. This increase was due to an increase in our full cost pool and an increase in our production, partially offset by an increase in our total proved reserves volume used to calculate our total DD&A expense.

General and Administrative Expenses. Net general and administrative expenses increased to $43.0 million for the nine months ended September 30, 2018 from $37.9 million for the nine months ended September 30, 2017. This $5.1 millionincrease was due to increases in salaries and benefits, employee stock compensation expense, legal fees, travel expenses and computer support, partially offset by a decrease in group health insurance. However, during the nine months ended September 30, 2018, we decreased our unit general and administrative expense by 8% to $0.12 per Mcfe from $0.13 per Mcfe during the nine months ended September 30, 2017.

Interest Expense. Interest expense increased to $100.9 million for the nine months ended September 30, 2018 from $74.8 million for the nine months ended September 30, 2017 due primarily to the issuance of $450.0 million in aggregate principal amount of our 2026 Notes in October 2017. In addition, total weighted average debt outstanding under our revolving credit facility was $91.3 million for the nine months ended September 30, 2018 as compared to $146.0 million for the same period in 2017. Additionally, we capitalized approximately $4.0 million and $8.8 million in interest expense to undeveloped oil and natural gas properties during the nine months ended September 30, 2018 and September 30, 2017, respectively. This decrease in capitalized interest in the 2018 period was primarily the result of changes to our development plan for our oil and natural gas properties.

Income Taxes. As of September 30, 2018, we had a federal net operating loss carryforward of approximately $312.2 million from prior years, in addition to numerous temporary differences, which gave rise to a net deferred tax asset. Quarterly, management performs a forecast of our taxable income to determine whether it is more likely than not that a valuation allowance is needed, looking at both positive and negative factors. A valuation allowance for our deferred tax assets is established if, in management’s opinion, it is more likely than not that some portion will not be realized. At September 30, 2018, a valuation allowance of $236.1 million had been provided against the net deferred tax assets. On December 22, 2017, the President of the United States signed into law the Tax Cuts and Jobs Act. Further information on the tax impacts of the Tax Cuts and Jobs Act is included in Note 14 of our consolidated financial statements.

Liquidity and Capital Resources

Overview.

Historically, our primary sources of funds have been cash flow from our producing oil and natural gas properties, borrowings under our credit facility and issuances of equity and debt securities. Our ability to access any of these sources of funds can be significantly impacted by decreases in oil and natural gas prices or oil and natural gas production.

Net cash flow provided by operating activities was $609.0 million for the nine months ended September 30, 2018 as compared to $491.7 million for the same period in 2017. This increase was primarily the result of an increase in cash receipts

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from our oil and natural gas purchasers due to a 32%increase in net revenues after giving effect to settled derivative instruments, partially offset by an increase in our operating expenses. In addition, we received $0.8 million in distributions from our investment in Strike Force and $1.2 million in dividends from our investment in Mammoth Energy.

Net cash used in investing activities for the nine months ended September 30, 2018 was $532.7 million as compared to $2.2 billion for the same period in 2017. During the nine months ended September 30, 2018, we spent $755.3 million in additions to oil and natural gas properties, of which $388.1 million was spent on our 2018 drilling, completion and recompletion activities, $192.0 million was spent on expenses attributable to wells spud, completed and recompleted during 2017, $2.1 million was spent on facility enhancements, $110.1 million was spent on lease related costs, primarily the acquisition of leases in the Utica Shale, with the remainder attributable mainly to future location development and capitalized general and administrative expenses. During the nine months ended September 30, 2018, we received $175.0 million from the sale of our equity investment in Strike Force and $51.5 million from the sale of Mammoth Energy's common stock. In addition, we invested $2.3 million in Grizzly, and we received $0.4 million in distributions from our investment in Timberwolf during the nine months ended September 30, 2018. We did not make any investments in our other equity investments during the nine months ended September 30, 2018. During the first quarter of 2017, we spent $1.3 billion to fund the cash portion of the purchase price for our SCOOP acquisition.

Net cash used in financing activities for the nine months ended September 30, 2018 was $51.2 million as compared to net cash provided by financing activities of $354.1 million for the same period in 2017. The 2018 amount used in financing activities is primarily attributable to purchases under our stock repurchase program of approximately $110.0 million, partially offset by net borrowings under our revolving credit facility.

Credit Facility.

We have entered into a senior secured revolving credit facility, as amended, with The Bank of Nova Scotia, as the lead arranger and administrative agent and certain lenders from time to time party thereto. The credit agreement provides for a maximum facility amount of $1.5 billion and matures on December 13, 2021. As of September 30, 2018, we had a borrowing base of $1.4 billion, with an elected commitment of $1.0 billion, and $60.0 million in borrowings outstanding. Total funds available for borrowing under our revolving credit facility, after giving effect to an aggregate of$316.2 millionof outstanding letters of credit, were$623.8 millionas of September 30, 2018. This facility is secured by substantially all of our assets. Our wholly-owned subsidiaries guarantee our obligations under our revolving credit facility.

Advances under our revolving credit facility may be in the form of either base rate loans or eurodollar loans. The interest rate for base rate loans is equal to (1) the applicable rate, which ranges from 0.25% to 1.25%, plus (2) the highest of: (a) the federal funds rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by agent as its “prime rate,” and (c) the eurodollar rate for an interest period of one month plus 1.00%. The interest rate for eurodollar loans is equal to (1) the applicable rate, which ranges from 1.25% to 2.25%, plus (2) the London interbank offered rate that appears on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate for deposits in U.S. dollars, or, if such rate is not available, the rate as administered by ICE Benchmark Administration (or any other person that takes over administration of such rate) per annum equal to the offered rate on such other page or other service that displays an average London interbank offered rate as administered by ICE Benchmark Administration (or any other person that takes over the administration of such rate) for deposits in U.S. dollars, or, if such rate is not available, the average quotations for three major New York money center banks of whom the agent shall inquire as the “London Interbank Offered Rate” for deposits in U.S. dollars. As of September 30, 2018, amounts borrowed under our revolving credit facility bore interest at the Eurodollar rate which resulted in a weighted average rate of3.72%.

Our revolving credit facility contains customary negative covenants including, but not limited to, restrictions on our and our subsidiaries’ ability to: incur indebtedness; grant liens; pay dividends and make other restricted payments; make investments; make fundamental changes; enter into swap contracts and forward sales contracts; dispose of assets; change the nature of their business; and enter into transactions with their affiliates. The negative covenants are subject to certain exceptions as specified in our revolving credit facility. Our revolving credit facility also contains certain affirmative covenants, including, but not limited to the following financial covenants: (1) the ratio of net funded debt to EBITDAX (net income, excluding (i) any non-cash revenue or expense associated with swap contracts resulting from ASC 815 and (ii) any cash or non-cash revenue or expense attributable to minority investment plus without duplication and, in the case of expenses, to the extent deducted from revenues in determining net income, the sum of (a) the aggregate amount of consolidated interest expense for such period, (b) the aggregate amount of income, franchise, capital or similar tax expense (other than ad valorem taxes) for such period, (c) all amounts attributable to depletion, depreciation, amortization and asset or goodwill impairment or writedown for such period, (d) all other non-cash charges, (e) exploration costs deducted in determining net income under successful efforts

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accounting, (f) actual cash distributions received from minority investments, (g) to the extent actually reimbursed by insurance, expenses with respect to liability on casualty events or business interruption, and (h) all reasonable transaction expenses related to dispositions and acquisitions of assets, investments and debt and equity offerings (provided that expenses related to any unsuccessful dispositions will be limited to $3.0 million in the aggregate) for a twelve-month period may not be greater than 4.00 to 1.00; and (2) the ratio of EBITDAX to interest expense for a twelve-month period may not be less than 3.00 to 1.00. We were in compliance with these financial covenants at September 30, 2018.

Senior Notes.

In April 2015, we issued an aggregate of $350.0 million in principal amount of our Senior Notes due 2023, or the 2023 Notes. Interest on these senior notes accrues at a rate of 6.625% per annum on the outstanding principal amount thereof from April 21, 2015, payable semi-annually on May 1 and November 1 of each year, commencing on November 1, 2015. The 2023 Notes will mature on May 1, 2023.

On October 14, 2016, we issued an aggregate of $650.0 million in principal amount of our Senior Notes due 2024, or the 2024 Notes. Interest on the 2024 Notes accrues at a rate of 6.000% per annum on the outstanding principal amount thereof from October 14, 2016, payable semi-annually on April 15 and October 15 of each year, commencing on April 15, 2017. The 2024 Notes will mature on October 15, 2024.

On December 21, 2016, we issued an aggregate of $600.0 million in principal amount of our Senior Notes due 2025, or the 2025 Notes. Interest on the 2025 Notes accrues at a rate of 6.375% per annum on the outstanding principal amount thereof from December 21, 2016, payable semi-annually on May 15 and November 15 of each year, commencing on May 15, 2017. The 2025 Notes will mature on May 15, 2025.

On October 11, 2017, we issued $450.0 million in aggregate principal amount of our 2026 Notes. Interest on the 2026 Notes accrues at a rate of 6.375% per annum on the outstanding principal amount thereof from October 11, 2017, payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2018. The 2026 Notes will mature on January 15, 2026. We received approximately $444.1 million in net proceeds from the offering of the 2026 Notes, a portion of which was used to repay all of our outstanding borrowings under our secured revolving credit facility on October 11, 2017 and the balance was used to fund the remaining outspend related to our 2017 capital development plans.

All of our existing and future restricted subsidiaries that guarantee our secured revolving credit facility or certain other debt guarantee the 2023 Notes, 2024 Notes, 2025 Notes and 2026 Notes, provided, however, that the 2023 Notes, 2024 Notes, 2025 Notes and 2026 Notes are not guaranteed by Grizzly Holdings, Inc. and will not be guaranteed by any of our future unrestricted subsidiaries. The guarantees rank equally in the right of payment with all of the senior indebtedness of the subsidiary guarantors and senior in the right of payment to any future subordinated indebtedness of the subsidiary guarantors. The 2023 Notes, 2024 Notes, 2025 Notes and 2026 Notes and the guarantees are effectively subordinated to all of our and the subsidiary guarantors’ secured indebtedness (including all borrowings and other obligations under our amended and restated credit agreement) to the extent of the value of the collateral securing such indebtedness, and structurally subordinated to all indebtedness and other liabilities of any of our subsidiaries that do not guarantee the 2023 Notes, 2024 Notes, 2025 Notes and 2026 Notes.

If we experience a change of control (as defined in the senior note indentures relating to the 2023 Notes, 2024 Notes, 2025 Notes and 2026 Notes), we will be required to make an offer to repurchase the 2023 Notes, 2024 Notes, 2025 Notes and 2026 Notes and at a price equal to 101% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase. If we sell certain assets and fail to use the proceeds in a manner specified in our senior note indentures, we will be required to use the remaining proceeds to make an offer to repurchase the 2023 Notes, 2024, 2025 Notes and 2026 Notes at a price equal to 100% of the principal amount thereof, plus accrued and unpaid interest, if any, to the date of repurchase. The senior note indentures relating to the 2023 Notes, 2024 Notes, 2025 Notes and 2026 Notes contain certain covenants that, subject to certain exceptions and qualifications, among other things, limit our ability and the ability of our restricted subsidiaries to incur or guarantee additional indebtedness, make certain investments, declare or pay dividends or make distributions on capital stock, prepay subordinated indebtedness, sell assets including capital stock of restricted subsidiaries, agree to payment restrictions affecting our restricted subsidiaries, consolidate, merge, sell or otherwise dispose of all or substantially all of our assets, enter into transactions with affiliates, incur liens, engage in business other than the oil and gas business and designate certain of our subsidiaries as unrestricted subsidiaries. Under the indenture relating to the 2023 Notes, 2024 Notes, 2025 Notes and 2026 Notes, certain of these covenants are subject to termination upon the occurrence of certain events, including in the event the 2023 Notes, 2024 Notes, 2025 Notes and 2026 Notes are ranked as “investment grade.”

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In connection with the issuance of the 2024 Notes, 2025 Notes and 2026 Notes, we and our subsidiary guarantors entered into registration rights agreements, pursuant to which we agreed to file a registration statement with respect to offers to exchange the 2024 Notes, 2025 Notes and 2026 Notes, as applicable, for new issues of substantially identical debt securities registered under the Securities Act. The exchange offers for the 2024 Notes and 2025 Notes were completed on September 13, 2017, and the exchange offer for the 2026 Notes was completed on March 22, 2018.

Construction Loan.

On June 4, 2015, we entered into a construction loan agreement, or the construction loan, with InterBank for the construction of our new corporate headquarters in Oklahoma City, which was substantially completed in December 2016. The construction loan allows for maximum principal borrowings of $24.5 million and required us to fund 30% of the cost of the construction before any funds could be drawn, which occurred in January 2016. Interest accrues daily on the outstanding principal balance at a fixed rate of 4.50% per annum and was payable on the last day of the month through May 31, 2017, after which date we began making monthly payments of interest and principal. The final payment is due June 4, 2025. As of September 30, 2018, the total borrowings under the construction loan were approximately$23.3 million.

Capital Expenditures.

Our recent capital commitments have been primarily for the execution of our drilling programs, for acquisitions in the Utica Shale and our recent SCOOP acquisition, and for investments in entities that may provide services to facilitate the development of our acreage. Our strategy is to continue to (1) increase cash flow generated from our operations by undertaking new drilling, workover, sidetrack and recompletion projects to exploit our existing properties, subject to economic and industry conditions, (2) pursue acquisition and disposition opportunities and (3) pursue business integration opportunities.

Of our net reserves at December 31, 2017, 64.9% were categorized as proved undeveloped. Our proved reserves will generally decline as reserves are depleted, except to the extent that we conduct successful exploration or development activities or acquire properties containing proved developed reserves, or both. To realize reserves and increase production, we must continue our exploratory drilling, undertake other replacement activities or use third parties to accomplish those activities.

From January 1, 2018 through September 30, 2018, we spud23gross (19.6net) wells in the Utica Shale. As of October 26, 2018, we had completed our 2018 drilling activity in the Utica and we did not have any rigs running in the play. We intend to commence sales from a total of 35 gross and net wells on our Utica Shale acreage in 2018. We also anticipate an additional seven net horizontal wells will be drilled, and sales commenced from ten net horizontal wells, on our Utica Shale acreage by other operators during 2018. We currently anticipate our 2018 capital expenditures will be approximately $455.0 million related to our operated and non-operated Utica Shale drilling and completion activity.

From January 1, 2018 through September 30, 2018, we spud12gross(11.0net) wells in the SCOOP. We currently anticipate our 2018 capital expenditures will be approximately $210.0 million related to our operated and non-operated SCOOP drilling and completion activity. As of October 26, 2018, we had two operated horizontal rigs running on our SCOOP acreage. We currently expect to spud a total of 15 gross (13 net) wells during 2018 and have concluded our completion activity for the year with a total of 15 gross (12 net) wells turned to sales on our SCOOP acreage during 2018. We also anticipate three net wells will be drilled, and sales commenced from four net wells, on this SCOOP acreage by other operators during 2018.

From January 1, 2018 through October 26, 2018, we recompleted 32 existing wells and spud no new wells at our WCBB field. In our Hackberry fields, from January 1, 2018 through October 26, 2018, we recompleted 15 existing wells and spud no new wells. We currently expect to spend approximately $20.0 million in 2018 to perform recompletion activities in Southern Louisiana.

From January 1, 2018 through October 26, 2018, no new wells were spud on our Niobrara Formation acreage. We do not currently anticipate any capital expenditures in the Niobrara Formation in 2018.

As of September 30, 2018, our net investment in Grizzly was approximately $53.4 million. We do not currently anticipate any material capital expenditures in 2018 related to Grizzly’s activities.

We had no capital expenditures during the nine months ended September 30, 2018 related to our interests in Thailand. We do not currently anticipate any capital expenditures in Thailand in 2018.

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In an effort to facilitate the development of our Utica Shale and other domestic acreage, we have invested in entities that can provide services that are required to support our operations. See Note 3 to our consolidated financial statements included elsewhere in this report for additional information regarding these other investments. During the nine months ended September 30, 2018, we received $0.8 million in distributions from Strike Force. We did not make any investments in any other of these entities during the nine months ended September 30, 2018.

On May 1, 2018, we sold our 25% equity interest in Strike Force to EQT Midstream Partners, LP for $175.0 million in cash. As a result of this transaction, all future capital obligations associated with Strike Force were eliminated, including $20.0 million that had been budgeted for the balance of 2018.

During 2015 and 2016, we continued to focus on operational efficiencies in an effort to reduce our overall well costs and deliver better results in a more economical manner, particularly in light of the continued downturn in commodity prices. We have successfully leveraged the lower commodity price environment to gain access to higher-quality equipment and superior services for reduced costs, which has contributed to increased productivity. In 2017, an increase in commodity prices allowed us to increase our capital budget as compared to 2016 and the resulting 2017 development activities enabled us to reach a size and scale, both financially and operationally, where we can navigate the current commodity price environment and adjust our business model accordingly. In response to forward natural gas prices, we are focused on delivering growth within cash flow by exercising strict capital discipline and, as such, currently expect to reduce our planned capital expenditures by approximately 25% as compared to 2017.

Our total capital expenditures for 2018 are currently estimated to be $685.0 million for drilling and completion expenditures, of which $638.1 million was spent as of September 30, 2018. In addition, we currently expect to spend approximately $130.0 million in 2018 for non-drilling and completion expenditures, which includes acreage expenses, primarily lease extensions in the Utica Shale, of which $96.3 million was spent as of September 30, 2018. Approximately 67% and 30% of our 2018 estimated drilling and completion capital expenditures are currently expected to be spent in the Utica Shale and in the SCOOP, respectively. The 2018 range of capital expenditures is lower than the $1.2 billion spent in 2017, primarily due to the decrease in current commodity prices, specifically natural gas prices, and our desire to fund our capital development program within cash flow.

In January 2018, our board of directors approved a stock repurchase program to acquire up to $100.0 million of our outstanding common stock during 2018, which we executed in full in the first quarter of 2018. Additionally, in May 2018, our board of directors authorized the expansion of the stock repurchase program, authorizing us to acquire up to an additional $100.0 million of our outstanding common stock during 2018 for a total of up to $200.0 million. We repurchased approximately $5.0 million of our outstanding common stock during the third quarter of 2018, resulting in a program total of $110.0 million as of September 30, 2018. We believe the repurchase of our outstanding common stock underscores the confidence we have in our business model, financial performance and asset base.  Purchases under the expanded repurchase program may be made from time to time in open market or privately negotiated transactions, and will be subject to market conditions, applicable legal requirements, contractual obligations and other factors. The repurchase program does not require us to acquire any specific number of shares. We intend to purchase shares under the repurchase program opportunistically with available funds while maintaining sufficient liquidity to fund our 2018 capital development program. This repurchase program is authorized to extend through December 31, 2018 and may be suspended from time to time, modified, extended or discontinued by the board of directors at any time.

We continually monitor market conditions and are prepared to adjust our drilling program if commodity prices dictate. Currently, we believe that our cash flow from operations, cash on hand and borrowings under our loan agreements will be sufficient to meet our normal recurring operating needs and capital requirements for the next twelve months. We believe that our strong liquidity position, hedge portfolio and conservative balance sheet position us well to react quickly to changing commodity prices and accelerate or decelerate our activity within the Utica Basin and SCOOP as the market conditions warrant. Notwithstanding the foregoing, in the event commodity prices decline from current levels, our capital or other costs increase, our equity investments require additional contributions and/or we pursue additional equity method investments or acquisitions, we may be required to obtain additional funds which we would seek to do through traditional borrowings, offerings of debt or equity securities or other means, including the sale of assets. We regularly evaluate new acquisition opportunities. Needed capital may not be available to us on acceptable terms or at all. Further, if we are unable to obtain funds when needed or on acceptable terms, we may be required to delay or curtail implementation of our business plan or not be able to complete acquisitions that may be favorable to us. If the current low commodity price environment worsens, our revenues, cash flows, results of operations, liquidity and reserves may be materially and adversely affected.

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Commodity Price Risk

See Item 3. “Quantitative and Qualitative Disclosures about Market Risk” for information regarding our open fixed price swaps at September 30, 2018.

Commitments

In connection with our acquisition in 1997 of the remaining 50% interest in the WCBB properties, we assumed the seller’s (Chevron) obligation to contribute approximately $18,000 per month through March 2004, to a plugging and abandonment trust and the obligation to plug a minimum of 20 wells per year for 20 years commencing March 11, 1997. Beginning in 2009, we can access the trust for use in plugging and abandonment charges associated with the property. As of September 30, 2018, the plugging and abandonment trust totaled approximately $3.1 million. At September 30, 2018, we have plugged 555 wells at WCBB since we began our plugging program in 1997, which management believes fulfills our minimum plugging obligation.

Contractual and Commercial Obligations

We have various contractual obligations in the normal course of our operations and financing activities. There have been no material changes to our contractual obligations from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2017.    

Off-balance Sheet Arrangements

We had no off-balance sheet arrangements as of September 30, 2018.

New Accounting Pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”) No. 2014-09, Revenue from Contracts with Customers("ASC 606"). ASC 606 supersedes existing industry specific revenue recognition guidance and increases disclosure requirements. The core principle of the new standard is for the recognition of revenue to depict the transfer of goods or services to customers in amounts that reflect the payment to which the company expects to be entitled in exchange for those goods or services. We adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method applied to contracts that were not completed as of that date. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard. Under the modified retrospective method, we recognize the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings; however, no adjustment was required as a result of adopting the new revenue standard. The comparative information has not been restated and continues to be reported under the historic accounting standards in effect for those periods. The impact of the adoption of the new revenue standard is not expected to be material to our net income on an ongoing basis.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard supersedes the previous lease guidance by requiring lessees to recognize a right-to-use asset and lease liability on the balance sheet for all leases with lease terms of greater than one year while maintaining substantially similar classifications for financing and operating leases. The guidance is effective for periods after December 15, 2018, and we will not early adopt. We expect to apply the transition method permitted by ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, issued in August 2018, which permits an entity to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption with no adjustment made to the comparative periods presented in the consolidated financial statements. We also expect to utilize the practical expedient provided by ASU 2018-11 to not separate non-lease components from the associated lease component and, instead, to account for those components as a single component if the non-lease components would be accounted for under ASC 606 and other conditions are met.

We have identified our portfolio of leased assets under the new standard and are in the process of evaluating the impact of this guidance on our consolidated financial statements and related disclosures. The adoption will increase asset and liability balances on the consolidated balance sheets due to the required recognition of right-of-use assets and corresponding lease liabilities; however, that impact is currently not known. We are in the process of designing processes and controls needed to comply with the requirements of the new standard, which includes the implementation of a lease accounting software solution to support lease portfolio management and accounting and disclosures.

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Additionally, in January 2018, the FASB issued ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842. The amendments in this update provide an optional expedient to not evaluate existing or expired land easements that were not previously accounted for under current leases guidance in Topic 840. An entity that elects this practical expedient should evaluate new or modified land easements beginning at the date of adoption. We do not currently account for any land easements under Topic 840 and plan to utilize this practical expedient in conjunction with the adoption of ASU 2016-02.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this ASU eliminates the probable initial recognition threshold in current GAAP and instead, requires an entity to reflect its current estimate of all expected credit losses. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposure, reinsurance receivables and any other financial assets not excluded from the scope that have the contractual right to receive cash. We are currently evaluating the impact this standard will have on our financial statements and related disclosures and do not anticipate it to have a material effect.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. This ASU clarifies how certain cash receipts and cash payments should be classified and presented in the statement of cash flows. We have made an accounting policy election to classify distributions received from equity method investees using the nature of the distribution approach, which classifies distributions received from investees as either cash inflows from operating activities or cash inflows from investing activities in the statement of cash flows based on the nature of the activities of the investee that generated the distribution. The impact of adopting this ASU was not material to prior periods presented.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU requires that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows and to provide a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet when the cash, cash equivalents, restricted cash, and restricted cash equivalents are presented in more than one line item on the balance sheet. We adopted this standard in the first quarter of 2018 using the retrospective transition method. The adoption of this standard had no impact on our statement of cash flows for the nine months ended September 30, 2018 and resulted in the addition of $185.0 million of restricted cash to the beginning cash balance and an increase to net cash used in investing activities by the same amount on our statement of cash flows for the nine months ended September 30, 2017.

In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business. Under the current business combination guidance, there are three elements of a business: inputs, processes and outputs. The revised guidance adds an initial screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets. If that screen is met, the set of assets is not a business. The new framework also specifies the minimum required inputs and processes necessary to be a business. We adopted this standard in the first quarter of 2018 with no significant effect on our financial statements or related disclosures.

In February 2018, the FASB issued ASU No. 2018-02, Income statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for standard tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendment will be effective for reporting periods beginning after December 15, 2018, and early adoption is permitted. We are currently assessing the impact of the ASU on our consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurementwhich removes, modifies, and adds certain disclosure requirements on fair value measurements. The amendment will be effective for reporting periods beginning after December 15, 2019, and early adoption is permitted. We are currently assessing the impact of the ASU on our consolidated financial statements and related disclosures

In August 2018, the FASB also issued ASU No. 2018-15 , Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for costs associated with implementing a cloud computing arrangement in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software. The amendment will be effective for reporting periods beginning after December 15, 2019, and early

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adoption is permitted. We are currently assessing the impact of the ASU on our consolidated financial statements and related disclosures.

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

Our revenues, operating results, profitability, future rate of growth and the carrying value of our oil and natural gas properties depend primarily upon the prevailing prices for oil and natural gas. Historically, oil and natural gas prices have been volatile and are subject to fluctuations in response to changes in supply and demand, market uncertainty and a variety of additional factors, including: worldwide and domestic supplies of oil and natural gas; the level of prices, and expectations about future prices, of oil and natural gas; the cost of exploring for, developing, producing and delivering oil and natural gas; the expected rates of declining current production; weather conditions, including hurricanes, that can affect oil and natural gas operations over a wide area; the level of consumer demand; the price and availability of alternative fuels; technical advances affecting energy consumption; risks associated with operating drilling rigs; the availability of pipeline capacity; the price and level of foreign imports; domestic and foreign governmental regulations and taxes; the ability of the members of the Organization of Petroleum Exporting Countries to agree to and maintain oil price and production controls; political instability or armed conflict in oil and natural gas producing regions; and the overall economic environment.

These factors and the volatility of the energy markets make it extremely difficult to predict future oil and natural gas price movements with any certainty. During 2017, WTI prices ranged from $42.48 to $60.46 per barrel and the Henry Hub spot market price of natural gas ranged from $2.44 to $3.71 per MMBtu. On October 26, 2018, the WTI posted price for crude oil was $67.59 per Bbl and the Henry Hub spot market price of natural gas was $3.27 per MMBtu. If the prices of oil and natural gas decline from current levels, our operations, financial condition and level of expenditures for the development of our oil and natural gas reserves may be materially and adversely affected. In addition, lower oil and natural gas prices may reduce the amount of oil and natural gas that we can produce economically. This may result in our having to make substantial downward adjustments to our estimated proved reserves. If this occurs or if our production estimates change or our exploration or development activities are curtailed, full cost accounting rules may require us to write down, as a non-cash charge to earnings, the carrying value of our oil and natural gas properties. Reductions in our reserves could also negatively impact the borrowing base under our revolving credit facility, which could further limit our liquidity and ability to conduct additional exploration and development activities.

To mitigate the effects of commodity price fluctuations on our oil and natural gas production, we had the following open fixed price swap positions at September 30, 2018:

	Location	Daily Volume (MMBtu/day)	Weighted Average Price
Remaining 2018	NYMEX Henry Hub	1,010,000	$	3.01
2019	NYMEX Henry Hub	1,154,000	$	2.81
2020	NYMEX Henry Hub	204,000	$	2.77

	Location	Daily Volume (Bbls/day)	Weighted Average Price
Remaining 2018	ARGUS LLS	2,000	$	56.22
2019	ARGUS LLS	1,000	$	59.55
Remaining 2018	NYMEX WTI	4,500	$	53.72
2019	NYMEX WTI	4,000	$	58.28

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	Location	Daily Volume (Bbls/day)	Weighted Average Price
2019	Mont Belvieu C2	1,000	$	18.48
Remaining 2018	Mont Belvieu C3	4,000	$	29.34
2019	Mont Belvieu C3	4,000	$	28.87
Remaining 2018	Mont Belvieu C5	500	$	46.62
2019	Mont Belvieu C5	500	$	54.08

We sold call options and used the associated premiums to enhance the fixed price for a portion of the fixed price natural gas swaps listed above. Each short call option has an established ceiling price. When the referenced settlement price is above the price ceiling established by these short call options, we pay our counterparty an amount equal to the difference between the referenced settlement price and the price ceiling multiplied by the hedged contract volume.

	Location	Daily Volume (MMBtu/day)	Weighted Average Price
October 2018 - March 2019	NYMEX Henry Hub	50,000	$	3.13
April 2019 - December 2019	NYMEX Henry Hub	30,000	$	3.10

For a portion of the natural gas fixed price swaps listed above, the counterparty has an option to extend the original terms an additional twelve months for the period January 2019 through December 2019. The option to extend the terms expires in December 2018. If executed, we would have additional fixed price swaps for 100,000 MMBtu per day at a weighted average price of $3.05 per MMBtu.

In addition, we have entered into natural gas basis swap positions, which settle on the pricing index to basis differential of Transco Zone 4 to NYMEX Henry Hub natural gas price. As of September 30, 2018, we had the following natural gas basis swap positions for Transco Zone 4.

	Location	Daily Volume (MMBtu/day)	Weighted Average Price
Remaining 2018	Transco Zone 4	40,000	$	(0.05	)
2019	Transco Zone 4	60,000	$	(0.05	)
2020	Transco Zone 4	60,000	$	(0.05	)

Under our 2018 contracts, we have hedged approximately 74% to 75% of our estimated 2018 production. Such arrangements may expose us to risk of financial loss in certain circumstances, including instances where production is less than expected or oil prices increase. At September 30, 2018, we had a net liability derivative position of $54.4 million as compared to a net liability derivative position of $7.1 million as of September 30, 2017, related to our fixed price swaps. Utilizing actual derivative contractual volumes, a 10% increase in underlying commodity prices would have reduced the fair value of these instruments by approximately $193.1 million, while a 10% decrease in underlying commodity prices would have increased the fair value of these instruments by approximately $190.3 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.

Our revolving amended and restated credit agreement is structured under floating rate terms, as advances under this facility may be in the form of either base rate loans or eurodollar loans. As such, our interest expense is sensitive to fluctuations in the prime rates in the U.S. or, if the eurodollar rates are elected, the eurodollar rates. At September 30, 2018, we had $60.0 million in borrowings outstanding under our credit facility which bore interest at the eurodollar rate of 3.72%. A 1.0% increase in the average interest rate for the nine months endedSeptember 30, 2018 would have resulted in an estimated $0.7 million increase in interest expense. As of September 30, 2018, we did not have any interest rate swaps to hedge our interest risks.

ITEM 4. CONTROLS AND PROCEDURES

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Evaluation of Disclosure Control and Procedures. Under the direction of our Interim Chief Executive Officer and our Chief Financial Officer, we have established disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. The disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to management, including our Interim Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.

As of September 30, 2018, an evaluation was performed under the supervision and with the participation of management, including our Interim Chief Executive Officer and our Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act. Based upon our evaluation, our Interim Chief Executive Officer and our Chief Financial Officer have concluded that, as of September 30, 2018, our disclosure controls and procedures were not effective solely due to the matters noted below.

In September 2018, the Audit Committee of our Board of Directors was informed that unauthorized use of the Company’s chartered aircraft by our Chief Executive Officer during the past four years was not timely identified, quantified and disclosed by the Company in the Company’s proxy statement on Schedule 14A.  The method the Company has used to determine the aggregate incremental costs related to aircraft use not directly related and integral to the performance of the Chief Executive Officer’s duties includes those excess costs that the Company would not have incurred but for such use by the Chief Executive Officer and personal guests and excludes any fixed costs.  Because the aircraft provided was chartered from a third party, these costs include the hourly fee charged by the charter company for the specific flight, and per flight fees, fuel variable charges, domestic segment fees, federal excise tax and other actual fees charged by the charter company related to the specific flight.  Personal guests on a flight that was directly related and integral to the Chief Executive Officer’s duties incurred negligible incremental costs and are not included in the calculation.  The aggregate incremental aircraft usage costs associated with our Chief Executive Officer’s personal use of the aircraft were approximately $107,300, $175,800, $138,700, $163,600 and $63,800 for 2014, 2015, 2016, 2017 and 2018, respectively. The Company is seeking reimbursement for these costs. None of the Company’s other named executive officers used the Company aircraft for personal purposes during this period.  Also in September 2018, the Audit Committee was informed that our Chief Executive Officer had made personal charges on his Company credit card.  These unauthorized charges were repaid periodically during the course of the year in which they were made and no personal charges are currently outstanding.  Although these personal charges were recorded and reported correctly and within the requisite time periods in the Company’s financial statements, such personal charges may have constituted personal loans that are not permissible under Section 402 of the Sarbanes-Oxley Act of 2002.  The maximum outstanding balances for personal charges at any time during any year in the period 2007 through 2018 ranged from a low of $808 in 2007 to a high of $347,164 in 2017, and the incremental cost to the Company for these personal charges prior to their repayment, based on the Company’s weighted average borrowing rate under its revolving credit facility during the applicable period (regardless of whether any amounts were actually outstanding under the revolving credit facility during such period), ranged from approximately an aggregate of $12 in 2007 to an aggregate of $5,016 in 2017.  The total incremental cost to the Company during the full 11-year period was approximately $9,493.  The Company is seeking reimbursement for these costs.

Following an in-depth review of the facts and circumstances surrounding these matters performed at the request of the Audit Committee by independent counsel, the Board of Directors has recommended, and the Company is undertaking, comprehensive remedial measures related to executive use of corporate aircraft and corporate credit cards.

These remedial measures include:

•Adoption and implementation of a new Private Aircraft Use Policy and additional training and reinforcement with respect to existing travel and expense policies;

•Quarterly review and reporting to the Audit Committee with respect to compliance by the Company’s named executive officers with travel and expense policies; and

•Additional resources to ensure full compliance with the Company’s new and existing policies and procedures.

Changes in Internal Control over Financial Reporting. There have not been any changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

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PART II

ITEM 1. LEGAL PROCEEDINGS

In two separate complaints, one filed by the State of Louisiana and the Parish of Cameron in the 38th Judicial District Court for the Parish of Cameron on February 9, 2016 and the other filed by the State of Louisiana and the District Attorney for the 15^th Judicial District of the State of Louisiana in the 15^th Judicial District Court for the Parish of Vermilion on July 29, 2016, we were named as a defendant, among 26 oil and gas companies, in the Cameron Parish complaint and among more than 40 oil and gas companies in the Vermilion Parish complaint, or the Complaints. The Complaints were filed under the State and Local Coastal Resources Management Act of 1978, as amended, and the rules, regulations, orders and ordinances adopted thereunder, which we referred to collectively as the CZM Laws, and allege that certain of the defendants’ oil and gas exploration, production and transportation operations associated with the development of the East Hackberry and West Hackberry oil and gas fields, in the case of the Cameron Parish complaint, and the Tigre Lagoon and Lac Blanc oil and gas fields, in the case of the Vermilion Parish complaint, were conducted in violation of the CZM Laws. The Complaints allege that such activities caused substantial damage to land and waterbodies located in the coastal zone of the relevant Parish, including due to defendants’ design, construction and use of waste pits and the alleged failure to properly close the waste pits and to clear, re-vegetate, detoxify and return the property affected to its original condition, as well as the defendants’ alleged discharge of waste into the coastal zone. The Complaints also allege that the defendants’ oil and gas activities have resulted in the dredging of numerous canals, which had a direct and significant impact on the state coastal waters within the relevant Parish and that the defendants, among other things, failed to design, construct and maintain these canals using the best practical techniques to prevent bank slumping, erosion and saltwater intrusion and to minimize the potential for inland movement of storm-generated surges, which activities allegedly have resulted in the erosion of marshes and the degradation of terrestrial and aquatic life therein. The Complaints also allege that the defendants failed to re-vegetate, refill, clean, detoxify and otherwise restore these canals to their original condition. In these two petitions, the plaintiffs seek damages and other appropriate relief under the CZM Laws, including the payment of costs necessary to clear, re-vegetate, detoxify and otherwise restore the affected coastal zone of the relevant Parish to its original condition, actual restoration of such coastal zone to its original condition, and the payment of reasonable attorney fees and legal expenses and pre-judgment and post judgment interest.

We were served with the Cameron complaint in early May 2016 and with the Vermilion complaint in early September 2016.  The Louisiana Attorney General and the Louisiana Department of Natural Resources intervened in both the Cameron Parish suit and the Vermilion Parish suit.  Shortly after the Complaints were filed, certain defendants removed the cases to the United States District Court for the Western District of Louisiana.  In both cases, the plaintiffs filed motions to remand the lawsuits to state court, which were ultimately granted by the district courts.  However, on May 23, 2018, a group of defendants again removed the Cameron Parish and Vermilion Parish lawsuits to federal court.  In response, the plaintiffs again filed motions to remand the cases to state court. The removing defendants have opposed plaintiffs’ motions to remand. The motions to remand remain pending, and further action in the cases will be stayed until the courts rule on the motions to remand.  Also, shortly after the May 23, 2018 removal, the removing defendants filed motions with the United States Judicial Panel on Multidistrict Litigation, or MDL Panel, requesting that the Cameron Parish and Vermilion Parish lawsuits be consolidated with 40 similar lawsuits so that pre-trial proceedings in the cases could be coordinated.  The MDL Panel denied the motion to consolidate the lawsuits. Due to the procedural posture of lawsuits, the cases are still in their early stages and the parties have conducted very little discovery. As a result, we have not had the opportunity to evaluate the applicability of the allegations made in plaintiffs' complaints to our operations and management cannot determine the amount of loss, if any, that may result.

In addition, due to the nature of our business, we are, from time to time, involved in routine litigation or subject to disputes or claims related to our business activities, including workers’ compensation claims and employment related disputes. In the opinion of our management, none of the pending litigation, disputes or claims against us, if decided adversely, will have a material adverse effect on our financial condition, cash flows or results of operations.

ITEM 1A. RISK FACTORS

See risk factors previously disclosed in our Annual Report on Form 10-K for the year ended December 31, 2017.

ITEM 2. UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS

Unregistered Sales of Equity Securities

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None.

Issuer Repurchases of Equity Securities

Our common stock repurchase activity for the three months ended September 30, 2018 was as follows:

Period	Total number of shares purchased	Average price paid per share		Total number of shares purchased as part of publicly announced plans or programs (1)	Approximate maximum dollar value of shares that may yet be purchased under the plans or programs (2)
July 2018	400,597	$	12.48	400,597	$	90,003,000
August 2018	—	$	—	—	$	90,003,000
September 2018	—	$	—	—	$	90,003,000
Total	400,597	$	12.48	400,597

(1)

In January 2018, our board of directors approved a stock repurchase program to acquire up to $100.0 million of our outstanding common stock, and in May 2018 expanded this program authorizing us to acquire up to an additional $100.0 million of our outstanding common stock, during 2018 for a total of up to $200.0 million. The repurchase program does not require us to acquire any specific number of shares. This repurchase program is authorized to extend through December 31, 2018 and may be suspended from time to time, modified, extended or discontinued by our board of directors at any time.

(2)

During the three months ended September 30, 2018, we repurchased and canceled approximately 0.4 million shares of our common stock at an average price of $12.48 per share for a total of $5.0 million. During the nine months ended September 30, 2018, we repurchased 10,505,469 shares under this program at a weighted average price of $10.47 per share.

ITEM 3. DEFAULTS UPON SENIOR SECURITIES

Not applicable.

ITEM 4. MINE SAFETY DISCLOSURES

Not applicable.

ITEM 5. OTHER INFORMATION

Effective October 29, 2018, Michael G. Moore stepped down from his position as our Chief Executive Officer and President and as a member of our board of directors. His resignation from the board was not a result of any disagreement with us or our operations.

Effective October 29, 2018, Donnie Moore, our Chief Operating Officer, assumed the duties of our principal executive officer on an interim basis until such time as we appoint a new Chief Executive Officer. Mr. Donnie Moore (who is not related to Michael G. Moore) has served as our Chief Operating Officer since January 2018. Mr. Moore’s biographical information and compensation, as well as other applicable information required by Items 401(b), (d) and (e) and 404(a) of Regulation S-K, are included in our Definitive Proxy Statement on Schedule 14A, filed with the Securities and Exchange Commission on April 30, 2018.

In connection with Mr. Moore’s departure, we entered into a Separation and Release Agreement with Mr. Moore which we refer to as the separation agreement. Under the terms of the separation agreement, we agreed to pay Mr. Moore separation payments in the aggregate amount of $400,000, payable on or before December 31, 2018, of which $300,000 is subject to Mr. Moore not revoking his agreement to release age discrimination claims during a seven-day revocation period that ends on November 8, 2018. Also, subject to the expiration of the seven-day revocation period and the executive’s proper election of COBRA continuation benefits, we agreed to reimburse Mr. Moore’s portion of COBRA premiums for a maximum of six

60

months, which reimbursement will cease at any time he becomes eligible for group medical coverage from another employer. The separation agreement also includes a release of claims by Mr. Moore against us, our directors, stockholders, employees, agents, attorneys, consultants and affiliates.

The preceding summary of the separation agreement is qualified in its entirety by reference to the full text of such agreement, a copy of which is attached as Exhibit 10.3 to this report and incorporated herein by reference.

ITEM 6. EXHIBITS

Exhibit Number	Description
3.1	Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on April 26, 2006).
3.2	Certificate of Amendment No. 1 to Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.2 to Form 10-Q, File No. 000-19514, filed by the Company with the SEC on November 6, 2009).
3.3	Certificate of Amendment No. 2 to Restated Certificate of Incorporation (incorporated by reference to Exhibit 3.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on July 23, 2013).
3.4	Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on July 12, 2006).
3.5	First Amendment to the Amended and Restated Bylaws (incorporated by reference to Exhibit 3.2 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on July 23, 2013).
3.6	Second Amendment to the Amended and Restated Bylaws (incorporated by reference to Exhibit 3.1 to the Form 8-K, File No. 000-19514, filed by the Company on May 2, 2014).
4.1	Form of Common Stock certificate (incorporated by reference to Exhibit 4.1 to Amendment No. 2 to the Registration Statement on Form SB-2, File No. 333-115396, filed by the Company with the SEC on July 22, 2004).
4.5	Indenture, dated as of April 21, 2015, among the Company, the subsidiary guarantors party thereto and Wells Fargo Bank, N.A., as trustee (including the form of the Company’s 6.625% Senior Notes due 2023) (incorporated by reference to Exhibit 4.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on April 21, 2015).
4.6	Indenture, dated as of October 14, 2016, among Gulfport Energy Corporation, the subsidiary guarantors party thereto and Wells Fargo Bank, N.A., as trustee (including the form of Gulfport Energy Corporation’s 6.000% Senior Notes due 2024) (incorporated by reference to Exhibit 4.1 to the Form 8-K, File. No. 000-19514, filed by the Company with the SEC on October 19, 2016).
4.7	Indenture, dated as of December 21, 2016, among Gulfport Energy Corporation, the subsidiary guarantors party thereto and Wells Fargo Bank, N.A., as trustee (including the form of Gulfport Energy Corporation’s 6.375% Senior Notes due 2025) (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, File No. 000-19514, filed by the Company with the SEC on December 21, 2016).
4.8	Indenture, dated as of October 11, 2017, among Gulfport Energy Corporation, the subsidiary guarantors party thereto and Wells Fargo Bank, N.A., as trustee (including the form of Gulfport Energy Corporation’s 6.375% Senior Notes due 2026) (incorporated by reference to Exhibit 4.1 to the Form 8-K, File No. 000-19514, filed by the Company with the SEC on October 11, 2017).
4.9	Registration Rights Agreement, dated as of February 17, 2017, by and between Gulfport Energy Corporation and Vitruvian II Woodford, LLC (incorporated by reference to Exhibit 4.1 to the Current Report on Form 8-K, File No. 000-19514, filed by the Company with the SEC on February 24, 2017).
10.1#	Amendment No. 2, dated as of July 10, 2018, between Stingray Pressure Pumping, LLC and Gulfport Energy Corporation to that certain Amended & Restated Master Services Agreement for Pressure Pumping Services, effective as of October 1, 2014, as amended effective January 1, 2016 (incorporated by reference to Exhibit 10.2 to the Quarterly Report on Form 10-Q, File No. 000-19514, filed by the Company with the SEC on August 2, 2018).
10.2*	Second Amendment to Sand Supply Agreement, dated as of August 6, 2018, between Gulfport Energy Corporation and Muskie Proppant LLC.
10.3*+	Separation and Release Agreement, effective October 29, 2018, by and between Gulfport Energy Corporation and Michael G. Moore.

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31.1*	Certification of Interim Chief Executive Officer of the Registrant pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
31.2*	Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(a) promulgated under the Securities Exchange Act of 1934, as amended.
32.1*	Certification of Interim Chief Executive Officer of the Registrant pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.
32.2*	Certification of Chief Financial Officer of the Registrant pursuant to Rule 13a-14(b) promulgated under the Securities Exchange Act of 1934, as amended, and Section 1350 of Chapter 63 of Title 18 of the United States Code.
101.INS*	XBRL Instance Document.
101.SCH*	XBRL Taxonomy Extension Schema Document.
101.CAL*	XBRL Taxonomy Extension Calculation Linkbase Document.
101.DEF*	XBRL Taxonomy Extension Definition Linkbase Document.
101.LAB*	XBRL Taxonomy Extension Labels Linkbase Document.
101.PRE*	XBRL Taxonomy Extension Presentation Linkbase Document.

*	Filed herewith.
#	Confidential treatment as to certain portions was granted with respect to this amendment and extended with respect to the original agreement by the SEC on September 17, 2018, which portions have been omitted and filed separately with the SEC.
+	Management contract, compensatory plan or arrangement.

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SIGNATURES

In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

Date: November 1, 2018

GULFPORT ENERGY CORPORATION
By:	/s/    Keri Crowell
	Keri Crowell Chief Financial Officer

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EX-10.2

Exhibit 10.2

SECOND AMENDMENT TO SAND SUPPLY AGREEMENT

This Second Amendment to Sand Supply Agreement (this “Second Amendment”) is made this 6th day of August, 2018 (the “Execution Date”) by and between Muskie Proppant LLC, a Delaware limited liability company, (“Supplier”); and Gulfport Energy Corporation, a Delaware corporation, (Customer”). Supplier and Customer are sometimes individually referred to as a “Party”, or collectively referred to as the “Parties”.

WHEREAS, Supplier and Customer entered into a that certain Sand Supply Agreement dated October 1, 2014, further amended and modified by that certain Amendment to Supply Agreement, dated October 1, 2015, (the “Agreement”), pursuant to which Supplier agreed to sell sand to Customer, more particularly 40/70 proppant sand (the “Product”), subject to the terms and conditions in the Agreement.

WHEREAS, Article I Section 1.1 of the Agreement provided for an Initial Term, commencing on October 1, 2014 and ending on September 30, 2018.

WHEREAS, Article I Section 1.2 of the Agreement allows the Parties to extend the Term of the Agreement by written amendment executed by both Parties.

WHEREAS, Supplier and Customer desire to extend the Term of the Agreement.

NOW THEREFORE, in consideration of the foregoing and for other good and valuable consideration, the receipt and adequacy of which is hereby acknowledged, and intending to be legally bound, the Parties agree as follows:

1.Defined Terms. Capitalized terms used but not defined herein shall have the same meanings given to such terms in the Agreement.

2.Recitals. The foregoing recitals are incorporated into and made a part of this Second Amendment.

3.Term. The Term, as defined by Article I of the Agreement, shall be extended to December 31, 2021.

4.Counterparts. This Amendment may be executed in a number of identical counterparts, including, without limitation, facsimile or email execution copies. If so executed, each counterpart is to be deemed an original for all purposes, and all such counterparts shall, collectively, constitute one agreement.

5.Binding Effect. This Amendment shall be binding upon and shall inure to the benefit of the Parties hereto and their respective legal representatives, successors and assigns.

6.Entire Agreement. This Amendment and the Agreement, together with their respective exhibits, constitute the entire understanding between the Parties with respect to the subject matter hereof, superseding all related negotiations, prior discussions and prior agreements and understandings. No amendment hereto shall be binding unless mutually agreed to in a written instrument specifically made subject to the Agreement, as modified by this Amendment.

[Signature Page Follows]

Exhibit 10.2

IN WITNESS WHEREOF, this Amendment has been duly executed by each Party as of the date first written above.

SELLER:	CUSTOMER:
Muskie Proppant, LLC	Gulfport Energy Corporation
By: /s/ Arty Straehla Name: Arty Straehla Title: CEO	By: /s/ Michael G. Moore Name: Michael G. Moore Title: CEO

EX-10.3

Exhibit 10.3

SEPARATION AND RELEASE AGREEMENT BETWEENGULFPORT ENERGY CORPORATION AND MICHAEL G. MOORE

THIS SEPARATION AND RELEASE AGREEMENT (this “Agreement”) is made and entered into by and between Gulfport Energy Corporation, a Delaware corporation (the “Company”), and Michael G. Moore (“Executive”).

RECITALS

WHEREAS, the parties to this Agreement recognize that Company has employed Executive as its Chief Executive Officer; that Executive has agreed to enter into this Agreement in exchange for the consideration detailed herein; that the Company has agreed to enter into this Agreement in exchange for certain releases and other considerations as detailed herein; and that without any admission as to fault, liability, or wrongdoing or as to the validity of the other party’s positions, the parties to this Agreement desire to forever resolve and compromise any and all Claims, as defined herein, that Executive has, or may have, against the Company and other Releasees, as defined herein; and

NOW, THEREFORE, in consideration of the mutual covenants contained herein, and intending to be legally bound hereby, the parties hereto agree as follows:

1.SEPARATION FROM EMPLOYMENT

1.Separation. The parties acknowledge and agree that Executive’s employment with the Company ended, effective October 29, 2018 (the “Separation Date”). As of the Separation Date, Executive has relinquished his duties and resigns from any and all offices, titles, or directorships held by Executive with the Company and any subsidiary or affiliate of the Company, including, without limitation, Executive’s position as a member of the Company’s Board of Directors. In addition, as of the Separation Date, Executive shall not be, and shall not hold himself out as, an employee, agent, or representative of the Company or any of the Releasees (as defined below).

1.1With the exception of Executive’s vested benefits, interests or rights, if any, in the Company’s 401(k) plan, the Gulfport Energy Corporation 2013 Restated Stock Incentive Plan, or other employee benefit plans in which Executive is a participant, if any, Executive acknowledges that, Executive has been paid all wages, compensation, benefits (including all earned and unused vacation days or paid time-off), less applicable tax withholding, and business expenses relating to Executive’s employment with the Company through Executive’s Separation Date.

1.2Benefit Plans. The benefits received by Executive and Executive’s eligible dependents under the Company’s group health plan will cease as of the last day of the month during which the Separation Date occurs. Thereafter, pursuant to governing law and independent of this Agreement, Executive will be entitled to elect benefit continuation coverage under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended (“COBRA”), if Executive timely applies for such coverage. Information regarding Executive’s eligibility for COBRA coverage, and the terms and conditions of such coverage, will be provided to Executive in a separate mailing.

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1.3Consideration for Releases.

1.3.1In connection with Executive’s separation and in exchange for the consideration provided to Executive under this Agreement, the Company shall pay Executive an initial separation payment in the amount of one hundred thousand dollars ($100,000), less applicable deductions and withholdings (the “Initial Separation Payment”). The Initial Separation Payment will be made in a single lump-sum payment , by direct deposit in accordance with existing bank instructions on file with the Company, within fourteen (14) days of the Effective Date of this Agreement, as defined herein.

1.3.2In exchange for Executive executing and complying with both this Agreement and the release attached hereto as Exhibit 1 (the “ADEA Release”), and for not timely revoking the ADEA Release in accordance with its terms, the Company shall pay Executive a second separation payment in the amount of three hundred thousand dollars ($300,000), less applicable deductions and withholdings (the “Supplemental Separation Payment”). Executive shall receive the Supplemental Separation Payment by direct deposit in accordance with existing bank instructions on file with the Company after the ADEA Release Effective Date, as defined in the ADEA Release. The Supplemental Separation Payment shall be made in a single lump-sum payment within thirty (30) days after the ADEA Release Effective Date but not later than December 31, 2018. .

1.3.3Also in exchange for Executive executing and complying with both this Agreement and the ADEA Release, if Executive properly elects COBRA continuation benefits, as set forth in Paragraph 1.2 above, the Company will reimburse the Employee portion of Executive’s COBRA premiums for a maximum of six (6) months; provided, however, that the Company’s reimbursement of continuation coverage may cease at any time Executive becomes eligible for group medical coverage from another employer. Executive acknowledges and agrees that Executive is solely responsible for all federal, state, and/or tax liability, if any, arising from any such COBRA reimbursement described in this Paragraph and that neither the Company nor any of its representatives have provided advice regarding the tax consequences of any consideration set forth in this Paragraph.

1.4Satisfaction of Liabilities. Executive acknowledges and agrees that the consideration provided in Section 1.3 above: (a) is in full discharge of any and all liabilities and obligations the Company or its subsidiaries have to Executive, monetarily or otherwise, with respect to Executive’s employment including, but not limited to, any obligations set forth in Executive’s Employment Agreement, dated April 30, 2018 (the “Employment Agreement”); and (b) exceeds any payment, benefit, or other thing of value to which Executive might otherwise be entitled. Executive specifically acknowledges and agrees that the Company has paid to Executive all of the wages, commissions, overtime, premiums, vacation, sick pay, holiday pay, equity, phantom equity, carried interest, bonuses, deferred compensation, and other forms of compensation, benefits, and perquisites to which Executive was or may have been entitled, and that the Company and its subsidiaries do not owe Executive any other wages, commissions, overtime, premiums, vacation, sick pay, holiday pay, equity, phantom equity, carried interest, bonuses, deferred compensation, or other forms of compensation, benefits, perquisites, or payments of any kind or

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nature, other than as explicitly provided in this Agreement. For the avoidance of doubt, Executive’s eligibility and entitlement to any 401(k) matching contributions the Company provides to eligible participants attributable to Executive’s compensation earned through the Separation Date during the 2018 plan year will be determined pursuant to the terms of the Company’s 401(k) plan.

1.5Return of the Company Property. Executive represents and warrants that, in compliance with Section 4 of the Employment Agreement, he has returned to the Company all property, proprietary materials, Confidential Information (as defined in the Employment Agreement), documents and computer media in any form (and all copies thereof) relating or belonging to any Releasee (as defined below) or any Releasee’s clients, customers, counterparties, suppliers, vendors, or investors (or potential clients, customers, counterparties, suppliers, vendors, or investors), including but not limited to all manuals; photographs; reports; spreadsheets; analyses; data; memoranda; correspondence; engineering studies, property surveys, processes, plans, devices, products, computer programs and other tangible and intangible property relating to the business of the Company; pricing information; supplier lists; vendor lists; plans; costs; software; equipment (including, but not limited to, computers and computer-related items, including all computer software, smartphones, and other devices); computer system and software passwords, access codes, and authorization codes; identification keys; the Company credit cards; and all other materials or other things in Executive’s possession, custody, or control which are the property of any of the Releasees, including but not limited to, any artwork or other thing of value that is the property of any of the Releasees. Executive also agrees that he shall return his Company vehicle to the Company by no later than November 30, 2018; that his failure to do so shall constitute a material breach of this Agreement; and that in the event of such breach, Executive will not be entitled to the remaining unpaid Supplemental Separation Payment but will remain bound by the promises, releases, covenants and other obligations set forth in this Agreement, including Exhibit 1.

1.6Releases of All Claims. In exchange for the consideration provided to Executive pursuant to this Agreement, Executive, on behalf of Executive and all of Executive’s heirs, executors, administrators, and assigns (collectively, “Releasors”), hereby releases and forever waives and discharges any and all claims, liabilities, causes of action, demands, suits, rights, costs, expenses, or damages of any kind or nature (collectively, “Claims”) that Executive or any of the other Releasors ever had, now have, or might have against the Company or any of its current, former, and future affiliates, subsidiaries, parents, and related companies (collectively with the Company, the “Company Group” and each a “Company Group Member”), and each Company Group Member’s respective current, former, and future divisions, shareholders, general partners, limited partners, directors, members, trustees, officers, employees, agents, attorneys, consultants, successors, and assigns (collectively, with the Company Group, the “Releasees” and each a “Releasee”), arising at any time prior to and including the Effective Date of this Agreement, whether such Claims are known to Executive or unknown to Executive, whether such Claims are accrued or contingent, including but not limited to any and all: (a) Claims arising out of, or that might be considered to arise out of or to be connected in any way with, Executive's employment or other relationship with any of the Releasees, or the termination of such employment or other relationship; (b) Claims under any contract, agreement, or understanding that Executive may have with any of the Releasees, whether written or oral, whether express or implied, at any time prior

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to the date Executive executes this Agreement (including, but not limited to, under any offer letter executed by Executive and the Company, the Employment Agreement by and between the Company and Executive and any prior employment agreements and any amendments or agreements relating thereto); (c) Claims arising under any federal, state, foreign, or local law, rule, ordinance, or public policy, including without limitation (i) Claims arising under Title VII of the Civil Rights Act of 1964, the Civil Rights Act of 1866, 42 U.S.C. § 1981, the Civil Rights Act of 1991, the Americans with Disabilities Act, the Family and Medical Leave Act, the Employee Retirement Income Security Act of 1974, the Vietnam Era Veterans Readjustment Act of 1974, the Immigration Reform and Control Act of 1986, the Equal Pay Act, the Labor Management Relations Act, the National Labor Relations Act, the Consolidated Omnibus Budget Reconciliation Act of 1985, the Occupational Safety and Health Act, the Genetic Information Nondiscrimination Act of 2008, the Rehabilitation Act of 1973, the Uniformed Services Employment and Reemployment Rights Act, the Worker Adjustment and Retraining Notification Act, the Sarbanes-Oxley Act of 2002, the Dodd-Frank Act, the Internal Revenue Code of 1986, or any other federal, state or local law relating to employment or discrimination in employment, including the Oklahoma Anti-Discrimination Act, and which will include, without limitation, any individual or class claims of discrimination on the basis of age, disability, sex, race, religion, national origin, citizenship status, marital status, sexual preference, or any other basis whatsoever, as all such laws have been amended from time to time, or any other federal, state, foreign, or local labor law, wage and hour law, worker safety law, employee relations or fair employment practices law, or public policy; (ii) Claims arising in tort, including but not limited to Claims for misrepresentation, defamation, libel, slander, invasion of privacy, conversion, replevin, false light, tortious interference with contract or economic advantage, negligence, fraud, fraudulent inducement, quantum meruit, promissory estoppel, prima facie tort, restitution, or the like; and (iii) Claims for compensation, wages, commissions, bonuses, royalties, stock options, restricted stock units, restricted stock, stock appreciation rights, deferred compensation, equity, phantom equity, carried interest, other monetary or equitable relief, vacation, personal or sick time, other fringe benefits, attorneys' or experts' fees or costs, forum fees or costs, or any tangible or intangible property of Executive's that remains with any of the Releasees; and (d) Claims arising under any other applicable law, regulation, rule, policy, practice, promise, understanding, or legal or equitable theory whatsoever. Further, to the extent permitted by law, Executive agrees not to be a member of any class or collective action, or a party to any multi-party action or proceeding, in which any claims are asserted against any of the Releasees based on any acts, omissions or other conduct occurring up to and including the date Executive signs this Agreement, and Executive waives any right or ability to be a class or collective action representative or join in any such class, collective or multi-party action or proceeding.

1.7    The foregoing release does not include (A) any claims under the Age Discrimination in Employment Act of 1967 (“ADEA”), 29 U.S.C. §621 et seq.; (B) any claims that arise after the Effective Date of this Agreement; (C) any claims for breach of the Employment Agreement and/or this Agreement or to enforce the terms of this Agreement, should that ever be necessary; (D) any claims that cannot be waived or released as a matter of law; (E) any claims for benefits under any Company employee benefit plan, including the 401(k) plan; or (F) claims for defense costs, indemnification, contribution, or advancement under the Indemnification Agreement dated November 3, 2014, the Bylaws of the Company, the General Corporation Law of the State of

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Delaware, and any applicable policies of insurance.  Executive specifically intends the release of Claims in Section 1.6 to the broadest possible release permitted by law and will also extend to release the Releasees, without limitation, from any and all Claims that Executive has alleged or could have alleged, whether known or unknown, accrued or unaccrued, against any Releasee for violation(s) of any of the Claims or causes of action described in this Agreement; any other federal, state, or local law or ordinance; any public policy, whistleblower, contract, tort, or common law Claim or action; and any demand for costs or litigation expenses, except as otherwise provided in the Employment Agreement, including but not limited to attorneys' fees.

1.1No Claims Filed. Executive represents and warrants that Executive has never commenced or filed, or caused to be commenced or filed, any lawsuit or arbitration against any of the Releasees. Except as otherwise provided in this Agreement, Executive further agrees not to commence, file, or in any way pursue, or cause or assist any person or entity to commence, file, or pursue, any lawsuit or arbitration against any of the Releasees in the future. For avoidance of doubt, nothing in this Agreement, any other agreement between Executive and the Company, or any Company policy shall prevent Executive from reporting suspected legal violations or filing a charge with the Equal Employment Opportunity Commission (the “EEOC”) or any other government agency or participating in any EEOC or other agency investigation; providedthat Executive may not receive any relief (including, but not limited to, reinstatement, back pay, front pay, damages, attorneys’ or experts’ fees, costs, and/or disbursements) as a consequence of any charge filed with the EEOC and/or any litigation arising out of an EEOC charge. Nothing herein shall restrict Executive’s right to receive an award for information provided to the U.S. Securities and Exchange Commission pursuant to Section 21F of the Securities Exchange Act of 1934.

1.2Indemnification. Executive agrees to indemnify and hold harmless each and all of the Releasees from and against any and all direct and indirect losses, costs, damages, and/or expenses, including, but not limited to, attorneys’ and experts’ fees, costs, and disbursements incurred by the Releasees, or any of them, arising out of any breach by Executive of this Agreement, or out of the fact that any representation or warranty made by Executive in this Agreement was false when made. Each of the Releasees is expressly intended to be a third party beneficiary of this Agreement and shall have authority to enforce this Agreement in accordance with its terms.

1.3No Admission. This Agreement shall not in any way be construed as an admission by any party of any liability, or of any wrongful acts whatsoever against any other person or entity.

1.4Breach of Agreement. Should Executive materially breach this Agreement, then: (a) the Company shall have no further obligations to Executive under this Agreement or otherwise; (b) the Company shall have all rights and remedies available to it under this Agreement and any applicable law or equitable theory; and (c) all of Executive’s promises, covenants, representations, and warranties under this Agreement will remain in full force and effect.

2.COVENANTS

2.1Surviving Provisions. This Agreement replaces and supersedes all previous agreements between Executive and the Company, except that this Agreement does not replace, modify, or extinguish (A) Executive’s continuing obligations under Section 4 of the Employment

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Agreement, including with respect to trade secrets, confidentiality, unfair competition, and patents and inventions; (B) Section 9 of the Employment Agreement, including with respect to non-solicitation; and (C) the Indemnification Agreement dated November 3, 2014 (collectively, the “Surviving Provisions”).

Executive is on notice that the Defend Trade Secrets Act of 2016 provides immunity from liability for confidential disclosure of a trade secret to the government or in a court filing provided the disclosure: (A) is made (i) in confidence to a Federal, State, or local governmental official, either directly or indirectly, or to an attorney and (ii) solely for the purpose of reporting or investigating a suspected violation of law; or (B) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.

2.2Cooperation; Third-Party Process. Executive agrees to provide reasonable assistance to and cooperation with the Company following the Separation Date in connection with any Company matters for which Executive had knowledge or responsibility while employed by the Company. If the Company is involved in any legal action or investigation, including but not limited to any internal investigation, after Executive’s Separation Date relating to events which occurred during Executive’s employment, Executive agrees to cooperate with the Company to the fullest extent possible, including cooperating in the preparation, prosecution, or defense of the Company’s case, including, but not limited to, the execution of affidavits or documents or providing information requested by the Company. Executive agrees that, in the event he is served with a subpoena, document request, interrogatory, or any other legal process that will or may require Executive to disclose any confidential information following the Separation Date, Executive will immediately notify the Company’s corporate counsel of such fact, in writing, and provide a copy of such subpoena, document request, interrogatory, or other legal process, and shall thereafter cooperate with the Company in any lawful response to such subpoena, document request, interrogatory, or legal process as the Company may request without any further compensation to Executive. The provisions of this Section will survive, following the expiration, suspension or termination, for any reason, of this Agreement.

2.3Non-Disparagement.

2.3.1Executive agrees not to make, or cause any other person or entity to make, any disparaging statement, written or oral, to any person or entity (including individuals and private and public entities) regarding the Company or the Releasees. In addition, following the Separation Date, Executive will not, whether in private or in public, directly or indirectly: (a) make, publish, encourage, ratify, or authorize, or aid, assist, or direct any other person or entity in making or publishing, any statements that in any way defame, criticize, malign, impugn, reflect negatively on, or disparage any Company Group Member, or any of the other Releasees, or place any Company Group Member or any other Releasee in a negative light, in any manner whatsoever; (b) comment upon or discuss any of the Releasees (whether disparagingly or otherwise) on any Media (as defined below); (c) make any statement, posting, or other communication (including on or through any Media) that purports to be on behalf of any Company Group Member, or which a third party may perceive (i) has been authorized, approved, or endorsed by a Company Group Member or (ii) reflects the views of any Company Group Member; (d) share, post, transmit, or

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upload any material related to any of the Releasees (regardless of whether such comments, statements, or material are disparaging) with, to, through, or on any Media; (e) utilize any Company Group Member’s logo, graphics, trade names, or trademarks on any Media or for any other purpose; (f) provide any Company Group Member’s promotional material to any Media outlet; or (g) aid, assist, or direct any other person or entity to do any of the foregoing. “Media” shall include any and all media sources, outlets, and forums, including but not limited to any reporters, bloggers, weblogs, websites (including but not limited to Facebook, MySpace, Twitter, LinkedIn, Instagram, Google+, Foursquare, PeekYou, MyLife, Glassdoor, and the like), chat rooms, newspapers, magazines, periodicals, journals, television stations or productions, radio stations, news organizations, news outlets, “apps,” or publications, or any movie, book, or theatrical production, or any statement in any public forum (i.e., lectures, to the media, in published articles, to analysts, or in comparable public forums), whether defamatory or not, to any person or entity regarding the Company’s management, legal or regulatory compliance, financial, personnel, marketing, bidding, investment, purchasing or customer service practices or procedures, or regarding whether the Company or any officer, director or shareholder thereof is acting or has acted in compliance with any federal, state or local law, regulation or ordinance. Executive may, however, disclose to any party, including without limitation potential employers, the fact that he was an employee of the Company and the dates of his tenure and a general description of the duties and responsibilities. For avoidance of doubt, nothing in this Section 2.3.1 shall be construed in a manner that would violate any law. The provisions of this Section 2.3.1 will survive following the expiration, suspension or termination, for any reason, of this Agreement.

2.3.2Executive agrees to direct all requests for information regarding his employment with the Company to Donnie Moore. Upon receipt of a request, the Company will provide neutral information that is limited to the fact that he was an employee of the Company, and the dates of his tenure. For avoidance of doubt, nothing in this Section 2.3.2 shall be construed in a manner that would violate any law. The provisions of this Section 2.3.2 will survive following the expiration, suspension or termination, for any reason, of this Agreement.

2.4Remedies. Executive agrees that any breach of the terms of this Section 2 would result in irreparable injury and damage for which there would be no adequate remedy at law. Executive therefore also agrees that in the event of said breach or any threat of breach, the Company will be entitled to an immediate injunction and restraining order to prevent such breach and/or threatened breach and/or continued breach by Executive and/or any and all persons and/or entities acting for and/or on behalf of him, without having to prove damages, in addition to any other remedies to which the Company may be entitled at law or in equity, as well as an award of the Company’s reasonable attorneys’ fees and disbursements, including expert witness fees, as a prevailing party, subject to the proviso set forth in the next sentence. The terms of this Section 2.4 will not prevent the Company from pursuing any other available remedies for any breach or threatened breach hereof, including but not limited to the recovery of damages. Executive further agrees that the provisions of the covenants are reasonable and reasonably calculated to protect from disclosure the trade secrets and proprietary information of the Company. Should a court or arbitrator determine, however, that any provision of the covenants is unreasonable or unenforceable, either in period of time, scope, or otherwise, the parties hereto agree that the

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covenant should be interpreted and enforced to the maximum extent which such court or arbitrator deems reasonable.

2.5Survival. The provisions of this Section 2 will survive any expiration, suspension or termination, for any reason, of this Agreement, and the existence of any claim or cause of action by Executive against the Company, whether predicated on this Agreement or otherwise, will not constitute a defense to the enforcement by the Company of the covenants and agreements of this Section 2.

3.MISCELLANEOUS

3.1Dispute Resolution. Any dispute arising between Executive, on the one hand, and any of the Releasees, on the other hand, including both Claims brought by Executive and any Claims brought against Executive, whether arising under this Agreement, under any statute, regulation, or ordinance, or otherwise, shall be submitted to binding arbitration before the American Arbitration Association (“AAA”) for resolution. Such arbitration shall be conducted in Oklahoma City, Oklahoma, and the arbitrator will apply Oklahoma law, including federal law as applied in Oklahoma courts. The arbitration shall be conducted in accordance with the AAA’s Employment Arbitration Rules as modified herein. The arbitration shall be conducted by a single arbitrator with substantial experience in the oil and gas production and exploration industry. The award of the arbitrator shall be final and binding on the parties, and judgment on the award may be confirmed and entered in any state or federal court in Oklahoma City, Oklahoma. The arbitration shall be conducted on a strictly confidential basis, and Executive shall not disclose the existence of any claim or defense, the nature of any claim or defense, any documents, exhibits, or information exchanged or presented in connection with any claim or defense, or the result of any action (collectively, “Arbitration Materials”), to any third party, with the sole exception of Executive’s legal counsel, who Executive shall ensure complies with all of the confidentiality terms of this Agreement. In the event of any court proceeding to challenge or enforce an arbitrator’s award, the parties hereby consent to the exclusive jurisdiction of the state and federal courts in Oklahoma City, Oklahoma and agree to venue in that jurisdiction. The parties agree to take all steps necessary to protect the confidentiality of the Arbitration Materials in connection with any such proceeding, agree to file all confidential information (and documents containing confidential information) under seal, and agree to the entry of an appropriate protective order encompassing the confidentiality terms of this Agreement.

3.2Controlling Law. This Agreement is to be governed and controlled by the laws of the State of Oklahoma, without regard to its rules of conflicts of law, except to the extent preempted by federal law. Venue for any judicial, administrative, arbitration, mediation or other alternative dispute resolution proceeding will be Oklahoma City, Oklahoma.

3.3Succession and Assignment. This Agreement will inure to the benefit of and will be binding upon the Company, its successors and assigns. The obligations and duties of Executive herein will be personal and not assignable.

3.4Notices. Any notice to be given under this Agreement must be in writing and will be deemed to have been given when delivered personally to the other party, or when mailed by

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Certified Mail, Return Receipt Requested, or telecopy, or by electronic mail, to the party to whom the notice is to be given. All notices will be deemed to have been given two (2) business days after they have been deposited as certified mail, return receipt requested, postage paid and properly addressed to the designated address of the party to receive the notices at the following addresses:

If to the Company:

Akin Gump Strauss Hauer & Feld LLP

1333 New Hampshire Avenue, NW

Washington, DC 20036-1564

Attn: Esther G. Lander

elander@akingump.com

If to Executive:

Michael G. Moore

2301 Catalina Drive

Edmond, Oklahoma 73013

3.5Publicity. Any publicity, advertisement or press release regarding the Company will be under the sole discretion and control of the Company, and no contact or discussions by Executive regarding the Agreement with the public press or media representatives may be had without the prior written consent of the Company.

3.6Extent of Agreement. This Agreement (including its Exhibit 1) sets forth the entire agreement between the parties hereto, fully supersedes any and all prior agreements or understandings between the parties, except for the Surviving Provisions and as otherwise expressly provided herein, and can be modified only in a written agreement signed by Executive, on the one hand, and the Company’s authorized representative, on the other hand. Executive specifically acknowledges and agrees that notwithstanding any discussions or negotiations Executive may have had with any of the Releasees prior to the execution of this Agreement, Executive is not relying on any promises or assurances other than those explicitly contained in this Agreement. This Agreement shall be deemed to have been made in Oklahoma City, Oklahoma, and shall be interpreted, construed, and enforced pursuant to the laws of the State of Oklahoma, without giving effect to Oklahoma’s conflict or choice of law principles.

3.7Waiver. The waiver of the breach of any term or of any condition of this Agreement will not be deemed to constitute the waiver of any other breach of the same or any other term or condition.

3.8Severability. If any provision of this Agreement is held invalid or unenforceable, the remainder of this Agreement will nevertheless remain in full force and effect, and if any provision is held invalid or unenforceable with respect to particular circumstances, it will nevertheless remain in full force and effect in all other circumstances. This Agreement shall be interpreted strictly in accordance with its terms, to the maximum extent permissible under

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governing law, and shall not be construed against or in favor of any party, regardless of which party drafted this Agreement or any provision hereof. If any provision of this Agreement is determined to be unenforceable as a matter of governing law, an arbitrator or reviewing court of appropriate jurisdiction shall have the authority to “blue pencil” or otherwise modify such provision so as to render it enforceable while maintaining the parties’ original intent to the maximum extent possible. Each provision of this Agreement is severable from the other provisions hereof, and if one or more provisions hereof are declared invalid, the remaining provisions shall nevertheless remain in full force and effect. For purposes of this Agreement, the connectives “and,” “or,” and “and/or” shall be construed either disjunctively or conjunctively as necessary to bring within the scope of a sentence or clause all subject matter that might otherwise be construed to be outside of its scope.

3.9Counterparts. This Agreement may be executed in two or more counterparts, each of which will be deemed to be an original but all of which together will constitute one and the same instrument. Signatures delivered by facsimile, “pdf,” or in another true and accurate photo-static form shall be deemed effective for all purposes.

3.10Advice of Counsel. Executive acknowledges that he has been advised to seek independent legal counsel for advice regarding the effect of the terms and provisions hereof, and has obtained such advice of independent legal counsel.

3.11Certain Tax Matters.

3.11.1Deferred Compensation Exceptions. Payments under this Agreement will be administered and interpreted to maximize the short-term deferral exception to and under Section 409A of the Internal Revenue Code of 1986, as amended (the “Code”), and the regulations thereunder (collectively, “Section 409A”) and the exception from Section 409A provided under Treas. Reg. § 1.409A-1(b)(9)(iii) for involuntary separation pay. Designated payment dates provided for in this Agreement are deemed to incorporate the grace periods provided by Treas. Reg. Section 1.409A-3(d), and the Executive will not be permitted, directly or indirectly, to designate the taxable year of any payment. The portion of any payment under this Agreement that is paid within the short-term deferral period (within the meaning of Code Section 409A and Treas. Regs. §1.409A-1(b)(4)) or that is eligible for the involuntary separation pay exception will not be treated as nonqualified deferred compensation and will not be aggregated with other nonqualified deferred compensation plans or payments.

3.11.2Separate Payments and Payment Timing. Any payment or installment made under this Agreement and any amount that is paid as a short-term deferral, within the meaning of Treas. Regs. §1.409A-1(b)(4), will be treated as separate payments. Executive will not, directly or indirectly, designate the taxable year of a payment made under this Agreement. Payment dates provided for in this Agreement will be deemed to incorporate grace periods that are treated as made upon a designated payment date within the meaning of Code Section 409A and Treas. Regs. §1.409A-3(d).

3.11.3General 409A Provisions. If for any reason, the short-term deferral exception or the involuntary separation pay exception is inapplicable, payments and benefits

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payable to Executive under this Agreement are intended to comply with the requirements of Section 409A. To the extent the payments and benefits under this Agreement are subject to Section 409A, this Agreement will be interpreted, construed and administered in a manner that satisfies the requirements of Sections 409A(a)(2), (3) and (4) of the Code and the Treasury Regulations thereunder (and any applicable transition relief under Section 409A). The Company does not guaranty or warrant the tax consequences of this Agreement and, except as specifically provided to the contrary in this Agreement, Executive will, in all cases, be liable for any taxes due as a result of this Agreement. Neither the Company nor any of its subsidiaries will have any obligation to indemnify or otherwise hold Executive harmless from any or all such taxes, interest or penalties, or liability for any damages related thereto. Executive acknowledges that he has been advised to obtain independent legal, tax or other counsel in connection with Section 409A.

(a)If Executive or the Company determines that any payments or benefits payable under this Agreement intended to comply with Sections 409A(a)(2), (3) and (4) of the Code do not comply with Section 409A, Executive and the Company agree to amend this Agreement, or take such other actions as Executive and the Company deem reasonably necessary or appropriate, to comply with the requirements of Section 409A, the Treasury Regulations thereunder (and any applicable relief provisions) while preserving the economic agreement of the parties. If any provision of the Agreement would cause such payments or benefits to fail to so comply, such provision will not be effective and will be null and void with respect to such payments or benefits, and such provision will otherwise remain in full force and effect.

(b)All payments considered nonqualified deferred compensation under Section 409A and the regulations thereunder will be made on the date(s) provided herein and no request to accelerate or defer any payment under this Section will be considered or approved for any reason whatsoever, except as permitted under Section 409A. Notwithstanding the foregoing, amounts payable hereunder which are not nonqualified deferred compensation, or which may be accelerated pursuant to Section 409A, such as distributions for applicable tax payments, may be accelerated, but not deferred, at the sole discretion of the Company.

(c)All references in this Agreement to termination of this Agreement or termination of services or termination mean Executive’s “separation from service” as that term is defined in Section 1.409A-1(h) of the Treasury Regulations.

(d)All reimbursements and in-kind benefits provided under this agreement that constitute deferred compensation within the meaning of Section 409A will be made or provided in accordance with the requirements of Section 409A, including that (i) in no event will reimbursements by the Company under this agreement be made later than the end of the calendar year next following the calendar year in which the applicable fees and expenses were incurred, provided that Executive submits an invoice for such fees and expenses at least 10 days before the end of the calendar year next following the calendar year in which such fees and expenses were incurred; and (ii) Executive’s right to have the Company pay or provide such reimbursements and in-kind benefits may not be liquidated or exchanged for any other benefit.

3.11.4Specified Executive Status. If Executive is a specified employee (within the meaning of Code Section 409A) on the date of his separation from service, any

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payments made with respect to such separation from service under this Agreement, and other payments or benefits under this Agreement that are subject to Section 409A, will be delayed in order to comply with Section 409A(a)(2)(B)(i) of the Code, and such payments or benefits will be paid or distributed to Executive during the five-day period commencing on the earlier of: (i) the expiration of the six-month period measured from the date of Executive’s separation from service, or (ii) the date of Executive’s death. Upon the expiration of the applicable six-month period under Section 409A(a)(2)(B)(i) of the Code, all payments deferred pursuant to this Section 3.12.4 will be paid to Executive (or Executive’s estate, in the event of Executive’s death) in a lump sum payment. Any remaining payments and benefits due under the Agreement will be paid as otherwise provided in the Agreement.

3.11.5Withholding Taxes. The Company may withhold from any amounts or benefits payable under this Agreement (including, without limitation, any Exhibit hereto) any taxes that are required to be withheld pursuant to any applicable law or regulation.

3.12Effective Date. Executive acknowledges that he is entitled to consider the terms of this Agreement for twenty-one (21) days before signing it. Executive further understands that this Agreement shall be null and void if he fails to execute this Agreement prior to expiration of the twenty-one (21) day period. To execute this Agreement, Executive must sign and date the Agreement below, and return a complete copy thereof to Akin Gump Strauss Hauer & Feld LLP, 1333 New Hampshire Avenue, NW, Washington, DC 20036-1564, Attn: Esther G. Lander. This Agreement will become effective, binding, enforceable, and irrevocable on the date it is signed by both Executive and an officer of the Company (the “Effective Date”). For avoidance of doubt, following the Effective Date, this Agreement will remain enforceable, binding, and irrevocable regardless of whether Executive executes the ADEA Release (and, if Executive does so, regardless of whether Executive timely revokes the ADEA Release); provided that if Executive does not timely execute the ADEA Release (or if Executive timely revokes the ADEA Release after signing it), he will not receive the consideration set forth in Section 1.3.2 or 1.3.3 of this Agreement.

3.13BY SIGNING BELOW, EXECUTIVE EXPRESSLY ACKNOWLEDGES, REPRESENTS, AND WARRANTS THAT EXECUTIVE HAS CAREFULLY READ THIS AGREEMENT; THAT EXECUTIVE IS FULLY COMPETENT TO MANAGE HIS BUSINESS AFFAIRS; THAT EXECUTIVE FULLY UNDERSTANDS THE TERMS, CONDITIONS, AND SIGNIFICANCE OF THIS AGREEMENT AND ITS FINAL AND BINDING EFFECT; THAT EXECUTIVE HAS HAD AMPLE TIME TO CONSIDER THIS AGREEMENT; THAT THE COMPANY HAS ADVISED EXECUTIVE TO CONSULT WITH AN ATTORNEY OF HIS CHOOSING CONCERNING THIS AGREEMENT; THAT EXECUTIVE HAS EXECUTED THIS AGREEMENT VOLUNTARILY, KNOWINGLY, AND WITH AN INTENT TO BE BOUND BY THIS AGREEMENT; AND THAT EXECUTIVE HAS FULL POWER AND AUTHORITY TO RELEASE EXECUTIVE’S CLAIMS AS SET FORTH HEREIN AND HAS NOT ASSIGNED ANY SUCH CLAIMS TO ANY OTHER INDIVIDUAL OR ENTITY.

[SIGNATURES ON FOLLOWING PAGE]

12

IN WITNESS WHEREOF, the parties have executed this Agreement as of the day and year opposite their respective signatures.

THECOMPANY:

Gulfport Energy Corporation

Date: October 31, 2018    By: /s/ David Houston

David Houston, Chairman of the Board

EXECUTIVE:

Date: October 31, 2018    /s/ Michael G. Moore

Michael G. Moore, in his individual capacity

13

EXHIBIT 1

ADEA RELEASE

In exchange for the payments and other consideration provided to Michael G. Moore (“Executive”) under the Separation and Release Agreement Between Gulfport Energy Corporation and Michael G. Moore (the “Separation Agreement”), to which this ADEA Release is an Exhibit, and as a precondition to Executive’s receipt of the payments and other consideration set forth in Section 1.3.2 and 1.3.3 thereof, Executive hereby agrees as follows. All capitalized terms utilized but not defined herein shall have the same meanings ascribed to them in the Separation Agreement:

1.    Executive hereby waives and releases any and all Claims that he or any of the other Releasors had, have, or might have against any of the Releasees under the Age Discrimination in Employment Act of 1967 (“ADEA”) (29 U.S.C. § 626, as amended)(a law that prohibits discrimination on the basis of age) and Older Workers Benefit Protection Act, whether such Claims are known to Executive or unknown to Executive, whether they are vested or contingent, whether they are suspected or unsuspected, and whether they are concealed or hidden, through the ADEA Release Effective Date (as defined below). Except as provided below, Executive agrees that neither he nor any of the other Releasors will initiate or cause to be initiated on his behalf any lawsuit or arbitration alleging that any of the Releasees violated the ADEA or any other law governing age discrimination.

2.    For avoidance of doubt, the foregoing Release does not include any claims that cannot be released or waived by law, nor does it prohibit Executive or any of the other Releasors from filing a charge or complaint with or participating in an investigation or proceeding conducted by any Government Agencies (including but not limited to the Equal Employment Opportunity Commission); provided, however, that Executive and the other Releasors are releasing and waiving the right to seek or accept any compensatory damages, back pay, front pay, or reinstatement remedies for Executive or the other Releasors personally with respect to any and all Claims released in this ADEA Release; and provided further that nothing herein shall restrict Executive’s right to receive an award for information provided to the U.S. Securities and Exchange Commission pursuant to Section 21F of the Securities Exchange Act of 1934.

3.    Executive acknowledges that by Executive executing this ADEA Release, Executive and the other Releasors are waiving and releasing any and all legal rights and claims they may have under the ADEA and all other federal, state and local laws regarding age discrimination, whether those claims are currently known to Executive or hereafter discovered. However, nothing in the foregoing is intended to limit or restrict Executive’s right to challenge the validity of this ADEA Release as to claims and rights asserted under the ADEA or Executive’s right to enforce the Separation Agreement. Executive further agrees that in the event he or any of the other Releasors brings any ADEA Claims against any of the Releasees, or in the event they seek to recover monetary or other compensation against any of the Releasees through any ADEA Claim brought by a governmental agency on their behalves, this ADEA Release shall serve as a complete defense to such Claims.

i

4.    Executive acknowledges that he is entitled to consider the terms of this ADEA Release for twenty-one (21) days before signing it. Executive further understands that this ADEA Release shall be null and void if he fails to execute this ADEA Release prior to expiration of the twenty-one (21) day period. To execute this ADEA Release, Executive must sign and date the ADEA Release below, and return a complete copy thereof to Akin Gump Strauss Hauer & Feld LLP, 1333 New Hampshire Avenue, NW, Washington, DC 20036-1564, Attn: Esther G. Lander, by hand delivery, email to elander@akingump.com (with “read” receipt), fax (with confirmation of delivery), or overnight courier. Should Executive execute this ADEA Release within the twenty-one (21) day period, Executive understands that he may revoke this ADEA Release within seven (7) days of the date he signs it (the “Revocation Period”). Executive may revoke his acceptance by notifying Esther G. Lander, in writing, within seven (7) calendar days after he executes this ADEA Release, by hand delivery, email (with “read” receipt), fax (with confirmation of delivery), or overnight courier, at the address noted above.

5.    If Executive does not revoke this ADEA Release within seven (7) days from the date he executes it, this ADEA Release will become fully binding, effective, and enforceable on the eighth (8th) calendar day after the day he executes it (the “ADEA Release Effective Date”). For avoidance of doubt, should Executive fail to timely execute this ADEA Release, or should he timely revoke this ADEA Release after signing it, (A) he shall receive the payments and benefits set forth in Paragraph 1.3.1 of the Separation Agreement, (B) the Company’s obligations under Paragraphs 1.3.2 and 1.3.3 of the Separation Agreement shall be null and void and of no force or effect, and (C) the remainder of the Separation Agreement shall remain binding, enforceable, and irrevocable.

6.    By signing below, Executive acknowledges and agrees that he (i) has carefully read and fully understands all of the provisions of the Separation Agreement (including this ADEA Release); (ii) knowingly and voluntarily agrees to all of the terms set forth in the Separation Agreement (including this ADEA Release); (iii) knowingly and voluntarily agrees to be legally bound by the Separation Agreement (including this ADEA Release); (iv) has been advised to consult with an attorney prior to signing this Separation Agreement (including this ADEA Release); (v) has full power to release his and the other Releasors’ ADEA Claims as set forth herein; and (vi) has not assigned any such Claims to any individual or to any corporation, partnership or any other entity or organization.

7.    This ADEA Release shall be part of the Separation Agreement and, once executed, may be enforced in accordance with the terms of the Separation Agreement. Executive understands that once the Separation Agreement becomes effective, it will remain effective and irrevocable regardless of whether this ADEA Release is timely executed (or, if it is executed, regardless of whether it is timely revoked); provided that if Executive does not timely execute the ADEA Release (or if Executive timely revokes the ADEA Release after signing it) he will not receive the consideration set forth in Section 1.3.2 or 1.3.3 of the Separation Agreement. Executive further understands that if he and/or the Company fail to timely execute the Separation Agreement, then the Separation Agreement (including this ADEA Release) will be null and void.

[SIGNATURES ON FOLLOWING PAGE]

ii

To confirm Executive’s understanding of, and agreement to the terms of this ADEA Release, and to execute it, he has signed and dated it below:

Date: October 31, 2018          /s/ Michael G. Moore

MICHAEL G. MOORE

iii

EX-31.1

Exhibit 31.1

CERTIFICATION

I, Donnie Moore, Interim Chief Executive Officer of Gulfport Energy Corporation, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Gulfport Energy Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: November 1, 2018

/s/ Donnie Moore

Donnie Moore

Interim Chief Executive Officer

EX-31.2

Exhibit 31.2

CERTIFICATION

I, Keri Crowell, Chief Financial Officer of Gulfport Energy Corporation, certify that:

1. I have reviewed this Quarterly Report on Form 10-Q of Gulfport Energy Corporation;

2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statement made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4. The registrant’s other certifying officer and I am responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in the Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

(a) Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

(b) Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

(c) Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

(d) Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5. The registrant’s other certifying officers and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of registrant’s board of directors (or persons performing the equivalent functions):

(a) All significant deficiencies and material weaknesses in the design or operation of internal controls over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

(b) Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal controls over financial reporting.

Date: November 1, 2018

/s/ Keri Crowell

Keri Crowell

Chief Financial Officer

EX-32.1

Exhibit 32.1

CERTIFICATION OF PERIODIC REPORT

I, Donnie Moore, Interim Chief Executive Officer of Gulfport Energy Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to the best of my knowledge:

(1) the Quarterly Report on Form10-Q of the Company for the quarterly period ended September 30, 2018 (the “Report”) fully complies with the requirements of Section 13 (a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 1, 2018

/s/ Donnie Moore

Donnie Moore

Interim Chief Executive Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

EX-32.2

Exhibit 32.2

CERTIFICATION OF PERIODIC REPORT

I, Keri Crowell, Chief Financial Officer of Gulfport Energy Corporation (the “Company”), certify, pursuant to Section 906 of the Sarbanes-Oxley Act of 2002, 18 U.S.C. Section 1350, that, to the best of my knowledge:

(1) the Quarterly Report on Form 10-Q of the Company for the quarterly period ended September 30, 2018 (the “Report”) fully complies with the requirements of Section 13 (a) or 15(d) of the Securities Exchange Act of 1934 (15 U.S.C. 78m(a) or 78o(d)); and

(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.

Dated: November 1, 2018

/s/ Keri Crowell

Keri Crowell

Chief Financial Officer

A signed original of this written statement required by Section 906 has been provided to the Company and will be retained by the Company and furnished to the Securities and Exchange Commission or its staff upon request.

XML

DOCUMENT AND ENTITY INFORMATION - shares	9 Months Ended
	Sep. 30, 2018	Oct. 29, 2018
Document And Entity Information [Abstract]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	Sep. 30, 2018
Entity Registrant Name	GULFPORT ENERGY CORP
Entity Central Index Key	0000874499
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2018
Entity Filer Category	Large Accelerated Filer
Document Fiscal Period Focus	Q3
Entity Emerging Growth Company	false
Entity Small Business	false
Entity Common Stock, Shares Outstanding (in shares)		173,302,055

XML

CONSOLIDATED BALANCE SHEETS (UNAUDITED) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Current assets:
Cash and cash equivalents	$ 124,571	$ 99,557
Accounts receivable—oil and natural gas sales	157,391	146,773
Accounts receivable—joint interest and other	39,511	35,440
Accounts receivable—related parties	79	0
Prepaid expenses and other current assets	9,742	4,912
Short-term derivative instruments	19,809	78,847
Total current assets	351,103	365,529
Property and equipment:
Oil and natural gas properties, full-cost accounting, $2,925,145 and $2,912,974 excluded from amortization in 2018 and 2017, respectively	9,936,714	9,169,156
Other property and equipment	92,388	86,754
Accumulated depletion, depreciation, amortization and impairment	(4,506,306)	(4,153,733)
Property and equipment, net	5,522,796	5,102,177
Other assets:
Equity investments	232,529	302,112
Long-term derivative instruments	3,530	8,685
Deferred tax asset	0	1,208
Inventories	8,234	8,227
Other assets	17,038	19,814
Total other assets	261,331	340,046
Total assets	6,135,230	5,807,752
Current liabilities:
Accounts payable and accrued liabilities	582,464	553,609
Asset retirement obligation—current	120	120
Short-term derivative instruments	62,601	32,534
Current maturities of long-term debt	647	622
Total current liabilities	645,832	586,885
Long-term derivative instruments	15,101	2,989
Asset retirement obligation—long-term	78,411	74,980
Deferred tax liability	3,046	0
Other non-current liabilities	0	2,963
Long-term debt, net of current maturities	2,100,825	2,038,321
Total liabilities	2,843,215	2,706,138
Commitments and contingencies (Note 9)
Preferred stock, $.01 par value; 5,000,000 authorized, 30,000 authorized as redeemable 12% cumulative preferred stock, Series A; 0 issued and outstanding	0	0
Stockholders’ equity:
Common stock - $.01 par value, 200,000,000 authorized, 173,218,643 issued and outstanding at September 30, 2018 and 183,105,910 at December 31, 2017	1,732	1,831
Paid-in capital	4,316,006	4,416,250
Accumulated other comprehensive loss	(46,354)	(40,539)
Retained deficit	(979,369)	(1,275,928)
Total stockholders’ equity	3,292,015	3,101,614
Total liabilities and stockholders’ equity	6,135,230	5,807,752
Eliminations
Current assets:
Cash and cash equivalents	0	0
Accounts receivable—oil and natural gas sales	0	0
Accounts receivable—joint interest and other	0	0
Accounts receivable—related parties	0
Prepaid expenses and other current assets	0	0
Short-term derivative instruments	0	0
Total current assets	(902,692)	(617,813)
Property and equipment:
Oil and natural gas properties, full-cost accounting, $2,925,145 and $2,912,974 excluded from amortization in 2018 and 2017, respectively	(729)	(729)
Other property and equipment	0	0
Accumulated depletion, depreciation, amortization and impairment	0	0
Property and equipment, net	(729)	(729)
Other assets:
Equity investments	(2,543,991)	(2,194,848)
Long-term derivative instruments	0	0
Deferred tax asset		0
Inventories	0	0
Other assets	0	0
Total other assets	(2,543,991)	(2,194,848)
Total assets	(3,447,412)	(2,813,390)
Current liabilities:
Accounts payable and accrued liabilities	0	(1)
Asset retirement obligation—current	0	0
Short-term derivative instruments	0	0
Current maturities of long-term debt	0	0
Total current liabilities	(902,692)	(617,814)
Long-term derivative instruments	0	0
Asset retirement obligation—long-term	0	0
Deferred tax liability	0
Other non-current liabilities		0
Long-term debt, net of current maturities	0	0
Total liabilities	(902,692)	(617,814)
Stockholders’ equity:
Common stock - $.01 par value, 200,000,000 authorized, 173,218,643 issued and outstanding at September 30, 2018 and 183,105,910 at December 31, 2017	0	0
Paid-in capital	(2,177,224)	(2,174,905)
Accumulated other comprehensive loss	44,338	38,593
Retained deficit	(411,834)	(59,264)
Total stockholders’ equity	(2,544,720)	(2,195,576)
Total liabilities and stockholders’ equity	(3,447,412)	(2,813,390)
Guarantors | Reportable legal entities
Current assets:
Cash and cash equivalents	35,357	31,649
Accounts receivable—oil and natural gas sales	45,928	34,087
Accounts receivable—joint interest and other	20,445	20,005
Accounts receivable—related parties	0
Prepaid expenses and other current assets	2,221	193
Short-term derivative instruments	0	0
Total current assets	344,324	149,308
Property and equipment:
Oil and natural gas properties, full-cost accounting, $2,925,145 and $2,912,974 excluded from amortization in 2018 and 2017, respectively	2,934,047	2,607,738
Other property and equipment	751	43
Accumulated depletion, depreciation, amortization and impairment	(39)	(37)
Property and equipment, net	2,934,759	2,607,744
Other assets:
Equity investments		77,744
Long-term derivative instruments	0	0
Deferred tax asset		0
Inventories	1,434	2,411
Other assets	4,020	7,331
Total other assets	5,454	87,486
Total assets	3,284,537	2,844,538
Current liabilities:
Accounts payable and accrued liabilities	118,038	137,361
Asset retirement obligation—current	0	0
Short-term derivative instruments	0	0
Current maturities of long-term debt	0	0
Total current liabilities	780,292	691,674
Long-term derivative instruments	0	0
Asset retirement obligation—long-term	12,777	11,839
Deferred tax liability	0
Other non-current liabilities		2,963
Long-term debt, net of current maturities	0	0
Total liabilities	793,069	706,476
Stockholders’ equity:
Common stock - $.01 par value, 200,000,000 authorized, 173,218,643 issued and outstanding at September 30, 2018 and 183,105,910 at December 31, 2017	0	0
Paid-in capital	1,915,598	1,915,598
Accumulated other comprehensive loss	0	0
Retained deficit	575,870	222,464
Total stockholders’ equity	2,491,468	2,138,062
Total liabilities and stockholders’ equity	3,284,537	2,844,538
Non-Guarantor | Reportable legal entities
Current assets:
Cash and cash equivalents	0	0
Accounts receivable—oil and natural gas sales	0	0
Accounts receivable—joint interest and other	0	0
Accounts receivable—related parties	0
Prepaid expenses and other current assets	0	0
Short-term derivative instruments	0	0
Total current assets	0	0
Property and equipment:
Oil and natural gas properties, full-cost accounting, $2,925,145 and $2,912,974 excluded from amortization in 2018 and 2017, respectively	0	0
Other property and equipment	0	0
Accumulated depletion, depreciation, amortization and impairment	0	0
Property and equipment, net	0	0
Other assets:
Equity investments	53,380	57,641
Long-term derivative instruments	0	0
Deferred tax asset		0
Inventories	0	0
Other assets	0	0
Total other assets	53,380	57,641
Total assets	53,380	57,641
Current liabilities:
Accounts payable and accrued liabilities	0	0
Asset retirement obligation—current	0	0
Short-term derivative instruments	0	0
Current maturities of long-term debt	0	0
Total current liabilities	128	127
Long-term derivative instruments	0	0
Asset retirement obligation—long-term	0	0
Deferred tax liability	0
Other non-current liabilities		0
Long-term debt, net of current maturities	0	0
Total liabilities	128	127
Stockholders’ equity:
Common stock - $.01 par value, 200,000,000 authorized, 173,218,643 issued and outstanding at September 30, 2018 and 183,105,910 at December 31, 2017	0	0
Paid-in capital	261,626	259,307
Accumulated other comprehensive loss	(44,338)	(38,593)
Retained deficit	(164,036)	(163,200)
Total stockholders’ equity	53,252	57,514
Total liabilities and stockholders’ equity	53,380	57,641
Parent | Reportable legal entities
Current assets:
Cash and cash equivalents	89,214	67,908
Accounts receivable—oil and natural gas sales	111,463	112,686
Accounts receivable—joint interest and other	19,066	15,435
Accounts receivable—related parties	79
Prepaid expenses and other current assets	7,521	4,719
Short-term derivative instruments	19,809	78,847
Total current assets	909,471	834,034
Property and equipment:
Oil and natural gas properties, full-cost accounting, $2,925,145 and $2,912,974 excluded from amortization in 2018 and 2017, respectively	7,003,396	6,562,147
Other property and equipment	91,637	86,711
Accumulated depletion, depreciation, amortization and impairment	(4,506,267)	(4,153,696)
Property and equipment, net	2,588,766	2,495,162
Other assets:
Equity investments	2,723,140	2,361,575
Long-term derivative instruments	3,530	8,685
Deferred tax asset		1,208
Inventories	6,800	5,816
Other assets	13,018	12,483
Total other assets	2,746,488	2,389,767
Total assets	6,244,725	5,718,963
Current liabilities:
Accounts payable and accrued liabilities	464,426	416,249
Asset retirement obligation—current	120	120
Short-term derivative instruments	62,601	32,534
Current maturities of long-term debt	647	622
Total current liabilities	768,104	512,898
Long-term derivative instruments	15,101	2,989
Asset retirement obligation—long-term	65,634	63,141
Deferred tax liability	3,046
Other non-current liabilities		0
Long-term debt, net of current maturities	2,100,825	2,038,321
Total liabilities	2,952,710	2,617,349
Stockholders’ equity:
Common stock - $.01 par value, 200,000,000 authorized, 173,218,643 issued and outstanding at September 30, 2018 and 183,105,910 at December 31, 2017	1,732	1,831
Paid-in capital	4,316,006	4,416,250
Accumulated other comprehensive loss	(46,354)	(40,539)
Retained deficit	(979,369)	(1,275,928)
Total stockholders’ equity	3,292,015	3,101,614
Total liabilities and stockholders’ equity	$ 6,244,725	$ 5,718,963

XML

CONSOLIDATED BALANCE SHEETS (UNAUDITED) (PARENTHETICAL) - USD ($) $ in Thousands	9 Months Ended	12 Months Ended
	Sep. 30, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Capitalized costs of oil and natural gas properties excluded from amortization	$ 2,925,145	$ 2,912,974
Preferred stock, par value (in usd per share)	$ 0.01	$ 0.01
Preferred stock, shares authorized (in shares)	5,000,000	5,000,000
Preferred stock, dividend rate	12.00%	12.00%
Preferred stock, shares authorized (in shares)	30,000	30,000
Preferred stock Series A, issued (in shares)	0	0
Preferred stock Series A, outstanding (in shares)	0	0
Common stock, par value (in usd per share)	$ 0.01	$ 0.01
Common stock, shares authorized (in shares)	200,000,000	200,000,000
Common stock, shares, issued (in shares)	173,218,643	183,105,910
Common stock, shares, outstanding (in shares)	173,218,643	183,105,910

XML

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Net (loss) gain on natural gas, oil, and NGL derivatives	$ (9,663)	$ (22,860)	$ (96,737)	$ 141,588
Total revenues	360,962	265,498	939,094	922,455
Costs and expenses:
Lease operating expenses	22,325	20,020	64,143	60,044
Production taxes	9,348	5,419	23,861	14,464
Midstream gathering and processing	78,913	69,372	214,546	176,258
Depreciation, depletion and amortization	119,915	106,650	352,848	254,887
General and administrative	15,848	13,065	42,955	37,922
Accretion expense	1,037	456	3,056	1,148
Acquisition expense	0	33	0	2,391
Total costs and expenses	247,386	215,015	701,409	547,114
INCOME (LOSS) FROM OPERATIONS	113,576	50,483	237,685	375,341
OTHER (INCOME) EXPENSE:
Interest expense	33,253	27,130	100,922	74,797
Interest income	(92)	(37)	(162)	(927)
Litigation settlement	917	0	917	0
Insurance proceeds	0	0	(231)	0
Gain on sale of equity method investments	(2,733)	0	(124,768)	(12,523)
(Income) loss from equity method investments, net	(12,858)	2,737	(35,282)	33,468
Other income	(61)	(345)	(201)	(863)
Total other (income) expense	18,426	29,485	(58,805)	93,952
INCOME (LOSS) BEFORE INCOME TAXES	95,150	20,998	296,490	281,389
INCOME TAX EXPENSE (BENEFIT)	0	2,763	(69)	2,763
NET INCOME (LOSS)	$ 95,150	$ 18,235	$ 296,559	$ 278,626
NET INCOME PER COMMON SHARE:
Basic (in usd per share)	$ 0.55	$ 0.10	$ 1.69	$ 1.56
Diluted (in usd per share)	$ 0.55	$ 0.10	$ 1.68	$ 1.56
Weighted average common shares outstanding - Basic (in shares)	173,057,538	182,957,416	175,776,312	178,736,569
Weighted average common shares outstanding - Diluted (in shares)	173,304,914	183,008,436	176,440,461	179,130,570
Natural gas sales
Revenues:
Revenue from contract with customer	$ 271,167	$ 223,340	$ 753,261	$ 606,544
Oil and condensate sales
Revenues:
Revenue from contract with customer	45,682	31,459	140,687	85,338
Natural gas liquid sales
Revenues:
Revenue from contract with customer	$ 53,776	$ 33,559	$ 141,883	$ 88,985

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CONSOLIDATED STATEMENTS OF COMPREHENSIVE INCOME (UNAUDITED) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Statement of Comprehensive Income [Abstract]
Net income	$ 95,150	$ 18,235	$ 296,559	$ 278,626
Foreign currency translation adjustment	3,052	6,832	(5,815)	12,719
Other comprehensive income (loss)	3,052	6,832	(5,815)	12,719
Comprehensive income	$ 98,202	$ 25,067	$ 290,744	$ 291,345

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CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY (UNAUDITED) - USD ($) $ in Thousands	Total	Common Stock	Paid-in Capital	Accumulated Other Comprehensive (Loss) Income	Retained Deficit
Beginning balance (in shares) at Dec. 31, 2016		158,829,816
Beginning balance at Dec. 31, 2016	$ 2,183,892	$ 1,588	$ 3,946,442	$ (53,058)	$ (1,711,080)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	278,626				278,626
Other comprehensive income (loss)	12,719			12,719
Stock-based Compensation	7,988		7,988
Issuance of common stock for the Vitruvian Acquisition, net of related expenses (in shares)		23,852,117
Issuance of Common Stock for the Vitruvian Acquisition, net of related expenses	459,436	$ 239	459,197
Issuance of Restricted Stock (in shares)		399,843
Issuance of Restricted Stock	0	$ 4	(4)
Ending balance (in shares) at Sep. 30, 2017		183,081,776
Ending balance at Sep. 30, 2017	$ 2,942,661	$ 1,831	4,413,623	(40,339)	(1,432,454)
Beginning balance (in shares) at Dec. 31, 2017	183,105,910	183,105,910
Beginning balance at Dec. 31, 2017	$ 3,101,614	$ 1,831	4,416,250	(40,539)	(1,275,928)
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	296,559				296,559
Other comprehensive income (loss)	(5,815)			(5,815)
Stock-based Compensation	9,654		9,654
Shares Repurchased (in shares)		(10,505,469)
Shares Repurchased	(109,997)	$ (105)	(109,892)
Issuance of Restricted Stock (in shares)		618,202
Issuance of Restricted Stock	$ 0	$ 6	(6)
Ending balance (in shares) at Sep. 30, 2018	173,218,643	173,218,643
Ending balance at Sep. 30, 2018	$ 3,292,015	$ 1,732	$ 4,316,006	$ (46,354)	$ (979,369)

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CONSOLIDATED STATEMENTS OF CASH FLOWS (UNAUDITED) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Cash flows from operating activities:
Net income	$ 296,559	$ 278,626
Adjustments to reconcile net income to net cash provided by operating activities:
Accretion expense	3,056	1,148
Depletion, depreciation and amortization	352,848	254,887
Stock-based compensation expense	5,792	4,793
(Income) loss from equity investments	(35,040)	34,018
Change in fair value of derivative instruments	106,373	(129,692)
Deferred income tax benefit	(69)	0
Amortization of loan commitment fees	4,554	3,548
Gain on sale of equity method investments	(124,768)	(12,523)
Distributions from equity method investments	1,978	0
Changes in operating assets and liabilities:
Increase in accounts receivable—oil and natural gas sales	(10,618)	(20,056)
Increase in accounts receivable—joint interest and other	(2,277)	(23,289)
Increase in accounts receivable—related parties	(79)	(346)
Increase in prepaid expenses and other current assets	(4,830)	(2,531)
Decrease (increase) in other assets	1,228	(5,665)
Increase in accounts payable, accrued liabilities and other	14,968	111,335
Settlement of asset retirement obligation	(719)	(2,520)
Net cash provided by operating activities	608,956	491,733
Cash flows from investing activities:
Additions to other property and equipment	(7,134)	(16,288)
Acquisition of oil and natural gas properties	0	(1,339,456)
Additions to oil and natural gas properties	(755,263)	(789,743)
Proceeds from sale of oil and natural gas properties	4,820	4,079
Proceeds from sale of other property and equipment	217	658
Proceeds from sale of equity method investments	226,487	0
Contributions to equity method investments	(2,318)	(44,844)
Distributions from equity method investments	446	4,114
Net cash used in investing activities	(532,745)	(2,181,480)
Cash flows from financing activities:
Principal payments on borrowings	(165,428)	(183)
Borrowings on line of credit	225,000	365,000
Borrowings on term loan	0	2,951
Debt issuance costs and loan commitment fees	(772)	(8,261)
Payments on repurchase of stock	(109,997)	0
Proceeds from issuance of common stock, net of offering costs	0	(5,364)
Net cash (used in) provided by financing activities	(51,197)	354,143
Net increase (decrease) in cash, cash equivalents and restricted cash	25,014	(1,335,604)
Cash, cash equivalents and restricted cash at beginning of period	99,557	1,460,875
Cash, cash equivalents and restricted cash at end of period	124,571	125,271
Supplemental disclosure of cash flow information:
Interest payments	75,045	50,826
Income tax payments	0	0
Supplemental disclosure of non-cash transactions:
Capitalized stock-based compensation	3,862	3,195
Asset retirement obligation capitalized	1,094	11,557
Interest capitalized	3,956	8,753
Foreign currency translation (loss) gain on equity method investments	$ (5,815)	$ 12,719

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

9 Months Ended

Sep. 30, 2018

Organization, Consolidation and Presentation of Financial Statements [Abstract]

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

These consolidated financial statements have been prepared by Gulfport Energy Corporation (the “Company” or “Gulfport”) without audit, pursuant to the rules and regulations of the Securities and Exchange Commission (the “SEC”), and reflect all adjustments which, in the opinion of management, are necessary for a fair presentation of the results for the interim periods, on a basis consistent with the annual audited consolidated financial statements. All such adjustments are of a normal recurring nature. Certain information, accounting policies, and footnote disclosures normally included in financial statements prepared in accordance with generally accepted accounting principles ("GAAP") have been omitted pursuant to such rules and regulations, although the Company believes that the disclosures are adequate to make the information presented not misleading. These consolidated financial statements should be read in conjunction with the consolidated financial statements and the summary of significant accounting policies and notes thereto included in the Company’s most recent annual report on Form 10-K. Results for the three and nine month periods ended September 30, 2018 are not necessarily indicative of the results expected for the full year.

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ACQUISITIONS

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

ACQUISITIONS

ACQUISITIONS

Vitruvian Acquisition

In December 2016, the Company, through its wholly-owned subsidiary Gulfport MidCon LLC (“Gulfport MidCon”) (formerly known as SCOOP Acquisition Company, LLC), entered into an agreement to acquire certain assets of Vitruvian II Woodford, LLC (“Vitruvian”), an unrelated third-party seller (the “Vitruvian Acquisition”). The assets included in the Vitruvian Acquisition include 46,400 net surface acres located in Grady, Stephens and Garvin Counties, Oklahoma. On February 17, 2017, the Company completed the Vitruvian Acquisition for a total initial purchase price of approximately $1.85 billion, consisting of $1.35 billion in cash, subject to certain adjustments, and approximately 23.9 million shares of the Company’s common stock (of which approximately 5.2 million shares were placed in an indemnity escrow). The cash portion of the purchase price was funded with the net proceeds from the Company's December 2016 common stock and senior note offerings and cash on hand. Acquisition costs of $0.03 million and $2.4 million were incurred during the three and nine months ended September 30, 2017, respectively, related to the Vitruvian Acquisition.No acquisition costs were incurred during the three and nine months ended September 30, 2018.

Allocation of Purchase Price

The Vitruvian Acquisition qualified as a business combination for accounting purposes and, as such, the Company estimated the fair value of the acquired properties as of the February 17, 2017 acquisition date. The fair value of the assets acquired and liabilities assumed was estimated using assumptions that represent Level 3 inputs. See Note 11 for additional discussion of the measurement inputs.

The Company estimated that the consideration paid in the Vitruvian Acquisition for these properties approximated the fair value that would be paid by a typical market participant. As a result,nogoodwill or bargain purchase gain was recognized in conjunction with the purchase.

The following table summarizes the consideration paid by the Company in the Vitruvian Acquisition to acquire the properties and the fair value amount of the assets acquired as of February 17, 2017.

	(In thousands)
Consideration:
Cash, net of purchase price adjustments	$	1,354,093
Fair value of Gulfport’s common stock issued	464,639
Total consideration	$	1,818,732
Estimated fair value of identifiable assets acquired and liabilities assumed:
Oil and natural gas properties
Proved properties	$	362,264
Unproved properties	1,462,957
Asset retirement obligations	(6,489		)
Total fair value of net identifiable assets acquired	$	1,818,732

The equity consideration included in the initial purchase price was based on an equity offering price of $20.96 on December 15, 2016. The decrease in the price of Gulfport’s common stock from $20.96 on December 15, 2016 to $19.48 on February 17, 2017 resulted in a decrease to the fair value of the total consideration paid as compared to the initial purchase price of approximately $35.3 million, which resulted in a closing date fair value lower than the initial purchase price.

Post-Acquisition Operating Results

For the three months ended September 30, 2017 and the period from the acquisition date of February 17, 2017 to September 30, 2017, the assets acquired in the Vitruvian Acquisition contributed the following amounts of revenue to the Company's consolidated statements of operations. The amount of net income contributed by the assets is not presented below as it is impracticable to calculate due to the Company integrating the acquired assets into its overall operations using the full cost method of accounting.

			Period from
			February 17, 2017
	Three months ended		to
	September 30, 2017		September 30, 2017
	(In thousands)
Revenue	$	60,940	$	137,706

Pro Forma Information (Unaudited)

The following unaudited pro forma combined financial information presents the Company’s results as though the Vitruvian Acquisition had been completed at January 1, 2017. The pro forma combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the Vitruvian Acquisition taken place on January 1, 2017; furthermore, the financial information is not intended to be a projection of future results.

	Three months ended		Nine months ended
	September 30, 2017		September 30, 2017
	(In thousands, except share data)
Pro forma revenue	$	265,498	$	958,354
Pro forma net income	$	18,235	$	300,052
Pro forma earnings per share (basic)	$	0.10	$	1.68
Pro forma earnings per share (diluted)	$	0.10	$	1.68

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PROPERTY AND EQUIPMENT

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

PROPERTY AND EQUIPMENT

PROPERTY AND EQUIPMENT

The major categories of property and equipment and related accumulated depletion, depreciation, amortization and impairment as of September 30, 2018 and December 31, 2017 are as follows:

	September 30, 2018			December 31, 2017
	(In thousands)
Oil and natural gas properties	$	9,936,714		$	9,169,156
Office furniture and fixtures	42,302			37,369
Building	44,565			44,565
Land	5,521			4,820
Total property and equipment	10,029,102			9,255,910
Accumulated depletion, depreciation, amortization and impairment	(4,506,306		)	(4,153,733		)
Property and equipment, net	$	5,522,796		$	5,102,177

Under 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 oil and natural gas properties. At September 30, 2018, the calculated ceiling was greater than the net book value of the Company’s oil and natural gas properties, thus no ceiling test impairment was required for the nine months ended September 30, 2018. No impairment was required for oil and natural gas properties for thenine months ended September 30, 2017.

Included in oil and natural gas properties at September 30, 2018 is the cumulative capitalization of $194.4 million in general and administrative costs incurred and capitalized to the full cost pool. General and administrative costs capitalized to the full cost pool represent management’s estimate of costs incurred directly related to exploration and development activities such as geological and other administrative costs associated with overseeing the exploration and development activities. All general and administrative costs not directly associated with exploration and development activities were charged to expense as they were incurred. Capitalized general and administrative costs were approximately $10.6 million and $28.8 million for the three and nine months ended September 30, 2018, respectively, and $8.9 million and $25.6 million for the three and nine months ended September 30, 2017, respectively.

The average depletion rate per Mcfe, which is a function of capitalized costs, future development costs and the related underlying reserves in the periods presented, was $0.94 and $0.89 per Mcfe for the nine months ended September 30, 2018 and 2017, respectively.

The following table summarizes the Company’s non-producing properties excluded from amortization by area at September 30, 2018:

	September 30, 2018
	(In thousands)
Utica	$	1,522,633
MidContinent	1,401,392
Niobrara	449
Southern Louisiana	571
Bakken	100
	$	2,925,145

At December 31, 2017, approximately $2.9 billion of non-producing leasehold costs was not subject to amortization.

The Company evaluates the costs excluded from its amortization calculation at least annually. Subject to industry conditions and the level of the Company’s activities, the inclusion of most of the above referenced costs into the Company’s amortization calculation typically occurs within three to five years. However, the majority of the Company’s non-producing leases in the Utica Shale have five-year extension terms which could extend this time frame beyond five years.

A reconciliation of the Company’s asset retirement obligation for the nine months ended September 30, 2018 and 2017 is as follows:

	September 30, 2018			September 30, 2017
	(In thousands)
Asset retirement obligation, beginning of period	$	75,100		$	34,276
Liabilities incurred	1,468			11,557
Liabilities settled	(719		)	(2,520		)
Accretion expense	3,056			1,148
Revisions in estimated cash flows	(374		)	—
Asset retirement obligation as of end of period	78,531			44,461
Less current portion	120			195
Asset retirement obligation, long-term	$	78,411		$	44,266

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EQUITY INVESTMENTS

9 Months Ended

Sep. 30, 2018

Equity Method Investments and Joint Ventures [Abstract]

EQUITY INVESTMENTS

EQUITY INVESTMENTS

Investments accounted for by the equity method consist of the following as of September 30, 2018 and December 31, 2017:

			Carrying value				(Income) loss from equity method investments
	Approximate ownership %		September 30, 2018		December 31, 2017		Three months ended September 30,						Nine months ended September 30,
							2018			2017			2018			2017
			(In thousands)
Investment in Tatex Thailand II, LLC	23.5	%	$	—	$	—	$	(137	)	$	(95	)	$	(241	)	$	(549	)
Investment in Grizzly Oil Sands ULC	24.9999	%	53,381		57,641		275			296			833			869
Investment in Timber Wolf Terminals LLC	50.0	%	—		983		—			4			536			8
Investment in Windsor Midstream LLC	22.5	%	39		30		—			(2		)	(9		)	25,232
Investment in Stingray Cementing LLC(1)	—	%	—		—		—			—			—			205
Investment in Stingray Energy Services LLC(1)	—	%	—		—		—			—			—			282
Investment in Sturgeon Acquisitions LLC(1)	—	%	—		—		—			—			—			(71		)
Investment in Mammoth Energy Services, Inc.(1)	22.0	%	179,109		165,715		(12,996		)	2,407			(35,708		)	4,907
Investment in Strike Force Midstream LLC(2)	—	%	—		77,743		—			127			(693		)	2,585
			$	232,529	$	302,112	$	(12,858	)	$	2,737		$	(35,282	)	$	33,468

(1)	On June 5, 2017, Mammoth Energy Services, Inc. ("Mammoth Energy") acquired Stingray Cementing LLC, Stingray Energy Services LLC and Sturgeon Acquisitions LLC. See below under Mammoth Energy Partners LP/Mammoth Energy Services, Inc. for information regarding these transactions.
(2)	On May 1, 2018, the Company sold its 25% interest in Strike Force Midstream to EQT Midstream Partners, LP. See below under under Strike Force Midstream LLC for information regarding this transaction.

The tables below summarize financial information for the Company’s equity investments as of September 30, 2018 and December 31, 2017.

Summarized balance sheet information:

	September 30, 2018		December 31, 2017
	(In thousands)
Current assets	$	481,394	$	415,032
Noncurrent assets	$	1,336,604	$	1,542,090
Current liabilities	$	358,177	$	261,086
Noncurrent liabilities	$	48,328	$	148,839

Summarized results of operations:    

	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
	(In thousands)
Gross revenue	$	384,043	$	160,950	$	1,451,580	$	357,901
Net income (loss)	$	68,414	$	2,101	$	181,884	$	(109,651	)

Tatex Thailand II, LLC

The Company has an indirect ownership interest in Tatex Thailand II, LLC (“Tatex II”). Tatex II holds an 8.5% interest in APICO, LLC (“APICO”), an international oil and gas exploration company. APICO has a reserve base located in Southeast Asia through its ownership of concessions covering approximately 180,000 acres which includes the Phu Horm Field. The Company received $0.2 million and $0.5 million in distributions from Tatex II during the nine months ended September 30, 2018 and 2017, respectively.

Tatex Thailand III, LLC

The Company has an ownership interest in Tatex Thailand III, LLC (“Tatex III”). Tatex III previously owned a concession covering approximately 245,000 acres in Southeast Asia. As of December 31, 2014, the Company reviewed its investment in Tatex III and, together with Tatex III, made the decision to allow the concession to expire in January 2015. As such, the Company fully impaired the asset as of December 31, 2014. In December 2017, Tatex III was dissolved and the Company received a final distribution of $0.2 million.

Grizzly Oil Sands ULC

The Company, through its wholly owned subsidiary Grizzly Holdings Inc. (“Grizzly Holdings”), owns an interest in Grizzly Oil Sands ULC (“Grizzly”), a Canadian unlimited liability company. The remaining interest in Grizzly is owned by Grizzly Oil Sands Inc. (“Oil Sands”). As of September 30, 2018, Grizzly had approximately 830,000 acres under lease in the Athabasca, Peace River and Cold Lake oil sands regions of Alberta, Canada. Grizzly has high-graded three oil sands projects to various stages of development. Grizzly commenced commercial production from its Algar Lake Phase I steam-assisted gravity drainage ("SAGD") oil sand project during the second quarter of 2014 and has regulatory approval for up to 11,300 barrels per day of bitumen production. Algar Lake production peaked at 2,200 barrels per day during the ramp-up phase of the SAGD facility, however, in April 2015, Grizzly made the decision to suspend operations at its Algar Lake facility due to the commodity price drop and its effect on project economics. Grizzly continues to monitor market conditions as it assesses start up plans for the facility. The Company reviewed its investment in Grizzly for impairment at September 30, 2018 and 2017 and determined no impairment was required. If commodity prices decline in the future however, impairment of the investment in Grizzly may be necessary. During the nine months ended September 30, 2018, Gulfport paid $2.3 million in cash calls. Grizzly’s functional currency is the Canadian dollar. The Company’s investment in Grizzly was increased by a $2.9 million foreign currency translation gain and decreased by a $5.7 million foreign currency translation loss for the three and nine months ended September 30, 2018, respectively. The Company’s investment in Grizzly was increased by $6.7 million and $12.5 million as a result of a foreign currency translation gain for the three and nine months ended September 30, 2017, respectively.

Timber Wolf Terminals LLC

During 2012, the Company invested in Timber Wolf Terminals LLC (“Timber Wolf”). Timber Wolf was formed to operate a crude/condensate terminal and a sand transloading facility in Ohio. During the nine months ended September 30, 2018 and 2017, the Company paid no cash calls to Timber Wolf. The Company received $0.4 million in distributions from Timber Wolf during the nine months ended September 30, 2018 resulting from the sale of assets held by Timber Wolf.

Windsor Midstream LLC

At September 30, 2018, the Company held a 22.5% interest in Windsor Midstream LLC (“Midstream”), an entity controlled and managed by an unrelated third party. The Company received no distributions from Midstream during the nine months ended September 30, 2018 and $0.5 million in distributions during the same period in 2017.

Stingray Cementing LLC

During 2012, the Company invested in Stingray Cementing LLC (“Stingray Cementing”). Stingray Cementing provides well cementing services. The (income) loss from equity method investments presented in the table above reflects any intercompany profit eliminations. On June 5, 2017, the Company contributed all of its membership interests in Stingray Cementing to Mammoth Energy. See below under Mammoth Energy Partners LP/Mammoth Energy Services, Inc. for information regarding this transaction.

Stingray Energy Services LLC

During 2013, the Company invested in Stingray Energy Services LLC (“Stingray Energy”). Stingray Energy provides rental tools for land-based oil and natural gas drilling, completion and workover activities as well as the transfer of fresh water to wellsites. The (income) loss from equity method investments presented in the table above reflects any intercompany profit eliminations. On June 5, 2017, the Company contributed all of its membership interests in Stingray Energy to Mammoth Energy. See below under Mammoth Energy Partners LP/Mammoth Energy Services, Inc. for information regarding this transaction.

Sturgeon Acquisitions LLC

During 2014, the Company invested in Sturgeon Acquisitions LLC (“Sturgeon”) and received an ownership interest of 25% in Sturgeon. Sturgeon owns and operates sand mines that produce hydraulic fracturing grade sand. On June 5, 2017, the Company contributed all of its membership interests in Sturgeon to Mammoth Energy. See below under Mammoth Energy Partners LP/Mammoth Energy Services, Inc. for information regarding this transaction.

Mammoth Energy Partners LP/Mammoth Energy Services, Inc.

In the fourth quarter of 2014, the Company contributed its investments in four entities to Mammoth Energy Partners LP (“Mammoth”) for a 30.5% interest in this entity. In October 2016, Mammoth converted from a limited partnership into a limited liability company named Mammoth Energy Partners LLC (“Mammoth LLC”) and the Company and the other members of Mammoth LLC contributed their interests in Mammoth LLC to Mammoth Energy. Following the contribution, Mammoth Energy completed its initial public offering of shares of its common stock.

On June 5, 2017, the Company contributed all of its membership interests in Sturgeon (which owned Taylor Frac, LLC, Taylor Real Estate Investments, LLC and South River Road, LLC), Stingray Energy and Stingray Cementing to Mammoth Energy in exchange for approximately 2.0 million shares of Mammoth Energy common stock (the "June 2017 Transactions"). The Company accounted for the transactions as a sale of financial assets under ASC 860, Transfers and Servicing. The Company valued the shares of Mammoth Energy common stock it received in the June 2017 Transactions at $18.50 per share, which was the closing price of Mammoth Energy common stock on June 5, 2017. During the second quarter of 2017, the Company recognized a gain of $12.5 million from the June 2017 Transactions, which is included in gain on sale of equity method investments in the accompanying consolidated statement of operations.

On June 29, 2018, the Company sold 1,235,600 shares of its Mammoth Energy common stock in an underwritten public offering for net proceeds of approximately $47.0 million. In connection with the Company's public offering of a portion of its shares of Mammoth Energy common stock, the Company granted the underwriters an option to purchase additional shares of its Mammoth Energy common stock. On July 26, 2018, the underwriters exercised this option, in part, and on July 30, 2018, the Company sold an additional 118,974 shares for net proceeds of approximately $4.5 million. Following the sales of these shares, the Company owned 9,829,548 shares, or approximately 22.0%, of Mammoth Energy's outstanding common stock. As a result of the sales, the Company recorded a gain of $2.7 million and $28.3 million for the three and nine months ended September 30, 2018, which is included in gain on sale of equity method investments in the accompanying consolidated statements of operations.

The Company’s investment in Mammoth Energy was increased by a $0.1 million foreign currency gain and decreased by a $0.2 million foreign currency loss resulting from Mammoth Energy’s foreign subsidiary for the three and nine months ended September 30, 2018, respectively. The Company’s investment in Mammoth Energy was increased by a $0.16 million and $0.2 million foreign currency gain resulting from Mammoth Energy’s foreign subsidiary for the three and nine months ended September 30, 2017, respectively. During the nine months ended September 30, 2018, Gulfport received distributions of $1.2 million from Mammoth Energy as a result of a $0.125 per share dividend in August 2018. The (income) loss from equity method investments presented in the table above reflects any intercompany profit eliminations.

Strike Force Midstream LLC

In February 2016, the Company, through its wholly-owned subsidiary Gulfport Midstream Holdings, LLC (“Midstream Holdings”), entered into an agreement with Rice Midstream Holdings LLC (“Rice”), then a subsidiary of Rice Energy Inc., to develop natural gas gathering assets in eastern Belmont County and Monroe County, Ohio through Strike Force Midstream LLC ("Strike Force"). In 2017, Rice was acquired by EQT Corporation ("EQT"). Prior to the sale of the Company's interest in Strike Force (discussed below), the Company owned a 25% interest in Strike Force, and EQT acted as operator and owned the remaining 75% interest. Strike Force's gathering assets provide gathering services for wells operated by Gulfport and other operators and connectivity of existing dry gas gathering systems. Prior to the sale of its interest in Strike Force, the Company elected to report its proportionate share of Strike Force’s earnings on a one-quarter lag as permitted under ASC 323, Investments - Equity Method and Joint Ventures. The (income) loss from equity method investments presented in the table above reflects any intercompany profit eliminations.

During the nine months ended September 30, 2018, Gulfport received distributions of $0.8 million from Strike Force. During the nine months ended September 30, 2017, Gulfport paid $43.0 million in cash calls to Strike Force and received distributions of $3.6 million from Strike Force.

On May 1, 2018, the Company sold its 25% interest in Strike Force to EQT Midstream Partners, LP for proceeds of $175.0 million in cash. As a result of the sale, the Company recognized a gain of $96.4 million net of transaction fees, which is included in gain on sale of equity method investments in the accompanying consolidated statement of operations.

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VARIABLE INTEREST ENTITIES

9 Months Ended

Sep. 30, 2018

Related Party Transactions [Abstract]

VARIABLE INTEREST ENTITIES

VARIABLE INTEREST ENTITIES

As of September 30, 2018, the Company held variable interests in the following variable interest entities (“VIEs”), but was not the primary beneficiary: Midstream and Timber Wolf. These entities have governing provisions that are the functional equivalent of a limited partnership and are considered VIEs because the limited partners or non-managing members lack substantive kick-out or participating rights which causes the equity owners, as a group, to lack a controlling financial interest. The Company is a limited partner or non-managing member in each of these VIEs and is not the primary beneficiary because it does not have a controlling financial interest. The general partner or managing member has power to direct the activities that most significantly impact the VIEs’ economic performance. The Company also held a variable interest in Strike Force prior to the sale of that interest due to the fact that it did not have sufficient equity capital at risk. The Company was not the primary beneficiary of this entity. Prior to Mammoth Energy’s initial public offering, or "IPO", Mammoth LLC was considered a VIE. As a result of the Company’s contribution of its interest in Mammoth LLC to Mammoth Energy in exchange for Mammoth Energy common stock and the completion of Mammoth Energy’s IPO, the Company determined that it no longer held an interest in a VIE. Prior to the contribution of Stingray Energy, Stingray Cementing and Sturgeon to Mammoth Energy, these entities were considered VIEs. As a result of the Company’s contribution of its membership interests in Stingray Energy, Stingray Cementing and Sturgeon to Mammoth Energy in exchange for Mammoth Energy common stock, the Company determined that it no longer held an interest in a VIE.

The Company accounts for its investment in these VIEs following the equity method of accounting. The carrying amounts of the Company’s equity investments are classified as other non-current assets on the accompanying consolidated balance sheets. The Company’s maximum exposure to loss as a result of its involvement with these VIEs is based on the Company’s capital contributions and the economic performance of the VIEs, and is equal to the carrying value of the Company’s investments which is the maximum loss the Company could be required to record in the consolidated statements of operations. See Note 3 for further discussion of these entities, including the carrying amounts of each investment.

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LONG-TERM DEBT

9 Months Ended

Sep. 30, 2018

Long-term Debt, Unclassified [Abstract]

LONG-TERM DEBT

LONG-TERM DEBT

Long-term debt consisted of the following items as of September 30, 2018 and December 31, 2017:

	September 30, 2018			December 31, 2017
	(In thousands)
Revolving credit agreement (1)	$	60,000		$	—
6.625% senior unsecured notes due 2023 (2)	350,000			350,000
6.000% senior unsecured notes due 2024 (3)	650,000			650,000
6.375% senior unsecured notes due 2025 (4)	600,000			600,000
6.375% senior unsecured notes due 2026 (5)	450,000			450,000
Net unamortized debt issuance costs (6)	(31,824		)	(34,781		)
Construction loan (7)	23,296			23,724
Less: current maturities of long term debt	(647		)	(622		)
Debt reflected as long term	$	2,100,825		$	2,038,321

The Company capitalized approximately $1.6 million and $4.0 million in interest expense to undeveloped oil and natural gas properties during the three and nine months ended September 30, 2018, respectively. The Company capitalized approximately $2.1 million and $8.8 million in interest expense to undeveloped oil and natural gas properties during the three and nine months ended September 30, 2017, respectively.

(1) The Company has entered into a senior secured revolving credit facility, as amended, with The Bank of Nova Scotia, as the lead arranger and administrative agent and certain lenders from time to time party thereto. The credit agreement provides for a maximum facility amount of $1.5 billion and matures on December 31, 2021. On March 29, 2017, the Company further amended its revolving credit facility to, among other things, amend the definition of the term EBITDAX to permit pro forma treatment of acquisitions that involve the payment of consideration by Gulfport and its subsidiaries in excess of $50.0 million and of dispositions of property or series of related dispositions of properties that yields gross proceeds to Gulfport or any of its subsidiaries in excess of $50.0 million. On May 4, 2017, the revolving credit facility was further amended to increase the borrowing base from $700.0 million to $1.0 billion, adjust certain of the Company’s investment baskets and add five additional banks to the syndicate. On November 21, 2017, the Company further amended its revolving credit facility to, among other things, (a) decrease the applicable rate for all loans by 0.5% and (b) add a provision that allows Gulfport to elect a commitment amount (the “Elected Commitment Amount”) that is less than the borrowing base. In connection with this amendment, the borrowing base was set at $1.2 billion, with an elected commitment of $1.0 billion. On May 21, 2018, the Company further amended its revolving credit facility to, among other things, (a) decrease the applicable rate for all loans by 0.25%, (b) permit Gulfport and each of its subsidiaries to use the proceeds from dispositions of certain investments to acquire the common stock or other equity interests of Gulfport, subject to certain limitations and (c) increase the borrowing base to $1.4 billion, with an elected commitment of $1.0 billion.

As of September 30, 2018, $60.0 million was outstanding under the revolving credit facility and the total availability for future borrowings under this facility, after giving effect to an aggregate of $316.2 million of letters of credit, was $623.8 million. The Company’s wholly-owned subsidiaries have guaranteed the obligations of the Company under the revolving credit facility.

Advances under the revolving credit facility may be in the form of either base rate loans or eurodollar loans. The interest rate for base rate loans is equal to (1) the applicable rate, which ranges from 0.25% to 1.25%, plus (2) the highest of: (a) the federal funds rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by agent as its “prime rate,” and (c) the eurodollar rate for an interest period of one month plus 1.00%. The interest rate for eurodollar loans is equal to (1) the applicable rate, which ranges from 1.25% to 2.25%, plus (2) the London interbank offered rate that appears on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate for deposits in U.S. dollars, or, if such rate is not available, the rate as administered by ICE Benchmark Administration (or any other person that takes over administration of such rate) per annum equal to the offered rate on such other page or service that displays on average London interbank offered rate as determined by ICE Benchmark Administration (or any other person that takes over administration of such rate) for deposits in U.S. dollars, or, if such rate is not available, the average quotations for three major New York money center banks of whom the agent shall inquire as the “London Interbank Offered Rate” for deposits in U.S. dollars. At September 30, 2018, amounts borrowed under the credit facility bore interest at the eurodollar rate with a weighted average of 3.72%.

The revolving credit facility contains customary negative covenants including, but not limited to, restrictions on the Company’s and its subsidiaries’ ability to:

•incur indebtedness;

•grant liens;

•pay dividends and make other restricted payments;

•make investments;

•make fundamental changes;

•enter into swap contracts;

•dispose of assets;

•change the nature of their business; and

•enter into transactions with affiliates.

The negative covenants are subject to certain exceptions as specified in the revolving credit facility. The revolving credit facility also contains certain affirmative covenants, including, but not limited to the following financial covenants:

(i) the ratio of net funded debt to EBITDAX (net income, excluding (i) any non-cash revenue or expense associated with swap contracts resulting from ASC 815 and (ii) any cash or non-cash revenue or expense attributable to minority investments plus without duplication and, in the case of expenses, to the extent deducted from revenues in determining net income, the sum of (a) the aggregate amount of consolidated interest expense for such period, (b) the aggregate amount of income, franchise, capital or similar tax expense (other than ad valorem taxes) for such period, (c) all amounts attributable to depletion, depreciation, amortization and asset or goodwill impairment or writedown for such period, (d) all other non-cash charges, (e) exploration costs deducted in determining net income under successful efforts accounting, (f) actual cash distributions received from minority investments, (g) to the extent actually reimbursed by insurance, expenses with respect to liability on casualty events or business interruption, and (h) all reasonable transaction expenses related to dispositions and acquisitions of assets, investments and debt and equity offerings (provided that expenses related to any unsuccessful disposition will be limited to $3.0 million in the aggregate) for a twelve-month period may not be greater than 4.00 to 1.00; and

(ii) the ratio of EBITDAX to interest expense for a twelve-month period may not be less than 3.00 to 1.00.

The Company was in compliance with its financial covenants at September 30, 2018.

(2) On April 21, 2015, the Company issued $350.0 million in aggregate principal amount of 6.625% Senior Notes due 2023 (the “2023 Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act (the “2023 Notes Offering”). The Company received net proceeds of approximately $343.6 million after initial purchaser discounts and commissions and estimated offering expenses.

The 2023 Notes were issued under an indenture, dated as of April 21, 2015, among the Company, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee. In October 2015, the 2023 Notes were exchanged for a new issue of substantially identical debt securities registered under the Securities Act. Pursuant to the indenture relating to the 2023 Notes, interest on the 2023 Notes accrues at a rate of 6.625% per annum on the outstanding principal amount thereof, payable semi-annually on May 1 and November 1 of each year. The 2023 Notes are not guaranteed by Grizzly Holdings, Inc. and will not be guaranteed by any of the Company’s future unrestricted subsidiaries.

(3) On October 14, 2016, the Company issued $650.0 million in aggregate principal amount of 6.000% Senior Notes due 2014 (the "2024 Notes"). The 2024 Notes were issued under an indenture, dated as of October 14, 2016, among the Company, the subsidiary guarantors party thereto and the senior note indenture trustee (the “2024 Indenture”), to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act (the “2024 Notes Offering”). Under the 2024 Indenture, interest on the 2024 Notes accrues at a rate of 6.000% per annum on the outstanding principal amount thereof from October 14, 2016, payable semi-annually on April 15 and October 15 of each year, commencing on April 15, 2017. The 2024 Notes will mature on October 15, 2024. The Company received approximately $638.9 million in net proceeds from the offering of the 2024 Notes, which was used, together with cash on hand, to purchase the then outstanding 2020 Notes in a concurrent cash tender offer, to pay fees and expenses thereof, and to redeem any of the 2020 Notes that remained outstanding after the completion of the tender offer.

(4) On December 21, 2016, the Company issued $600.0 million in aggregate principal amount of 6.375% Senior Notes due 2025 (the “2025 Notes”). The 2025 Notes were issued under an indenture, dated as of December 21, 2016, among the Company, the subsidiary guarantors party thereto and the senior note indenture trustee (the “2025 Indenture”), to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. Under the 2025 Indenture, interest on the 2025 Notes accrues at a rate of 6.375% per annum on the outstanding principal amount thereof from December 21, 2016, payable semi-annually on May 15 and November 15 of each year, commencing on May 15, 2017. The 2025 Notes will mature on May 15, 2025. The Company received approximately $584.7 million in net proceeds from the offering of the 2025 Notes, which was used, together with the net proceeds from the Company’s December 2016 common stock offering and cash on hand, to fund the cash portion of the purchase price for the Vitruvian Acquisition. See “Note 1 – Acquisitions” for additional discussion of the Vitruvian Acquisition.

(5) On October 11, 2017, the Company issued $450.0 million in aggregate principal amount of its 6.375% Senior Notes due 2026 (the “2026 Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. Interest on the 2026 Notes accrues at a rate of 6.375% per annum on the outstanding principal amount thereof from October 11, 2017, payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2018. The 2026 Notes will mature on January 15, 2026. The Company received approximately $444.1 million in net proceeds from the offering of the 2026 Notes, a portion of which was used to repay all of the Company's outstanding borrowings under its secured revolving credit facility on October 11, 2017 and the balance was used to fund the remaining outspend related to the Company's 2017 capital development plans.

In connection with the 2026 Notes offering, the Company and its subsidiary guarantors entered into a registration rights agreement pursuant to which the Company agreed to file a registration statement with respect to an offer to exchange the 2026 Notes for a new issue of substantially identical debt securities registered under the Securities Act. On January 18, 2018, the Company filed a registration statement on Form S-4 with respect to an offer to exchange the 2026 Notes for substantially identical debt securities registered under the Securities Act, which registration statement was declared effective by the SEC on February 12, 2018. The exchange offer relating to the 2026 notes closed on March 22, 2018.

(6) Loan issuance costs related to the 2023 Notes, the 2024 Notes, the 2025 Notes and the 2026 Notes (collectively the “Notes”) have been presented as a reduction to the Notes. At September 30, 2018, total unamortized debt issuance costs were $4.6 million for the 2023 Notes, $9.0 million for the 2024 Notes, $12.9 million for the 2025 Notes and $5.2 million for the 2026 Notes. In addition, loan commitment fee costs for the construction loan agreement described immediately below were $0.1 million at September 30, 2018.

(7) On June 4, 2015, the Company entered into a construction loan agreement (the “Construction Loan”) with InterBank for the construction of a new corporate headquarters in Oklahoma City, which was substantially completed in December 2016. The Construction Loan allows for maximum principal borrowings of $24.5 million and required the Company to fund 30% of the cost of the construction before any funds could be drawn, which occurred in January 2016. Interest accrues daily on the outstanding principal balance at a fixed rate of 4.50% per annum and was payable on the last day of the month through May 31, 2017. Starting June 30, 2017, the Company began making monthly payments of principal and interest, with the final payment due June 4, 2025. At September 30, 2018, the total borrowings under the Construction Loan were approximately $23.3 million.

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COMMON STOCK AND CHANGES IN CAPITALIZATION

9 Months Ended

Sep. 30, 2018

Equity [Abstract]

COMMON STOCK AND CHANGES IN CAPITALIZATION

COMMON STOCK AND CHANGES IN CAPITALIZATION

Issuance of Common Stock

On February 17, 2017, the Company completed the Vitruvian Acquisition for a total initial purchase price of approximately $1.85 billion, consisting of $1.35 billion in cash, subject to certain adjustments, and approximately 23.9 million shares of the Company’s common stock (of which approximately 5.2 million shares are subject to the indemnity escrow). See “Note 1 - Acquisitions” for additional discussion of the Vitruvian Acquisition.

Stock Repurchase Program

In January 2018, the board of directors of the Company approved a stock repurchase program to acquire up to $100 million of the Company's outstanding stock during 2018. In May 2018, the Company's board of directors authorized the expansion of its stock repurchase program, authorizing the Company to acquire up to an additional $100 million of its outstanding common stock during 2018 for a total of up to $200 million. Purchases under the repurchase program may be made from time to time in open market or privately negotiated transactions, and are subject to market conditions, applicable legal requirements, contractual obligations and other factors. The repurchase program does not require the Company to acquire any specific number of shares. This repurchase program is authorized to extend through December 31, 2018 and may be suspended from time to time, modified, extended or discontinued by the board of directors at any time. The Company repurchased 0.4 million and 10.5 million shares for a cost of approximately $5.0 million and $110.0 million during the three and nine months ended September 30, 2018, respectively. All repurchased shares have been retired.

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STOCK-BASED COMPENSATION

9 Months Ended

Sep. 30, 2018

Share-based Compensation [Abstract]

STOCK-BASED COMPENSATION

STOCK-BASED COMPENSATION

During the three and nine months ended September 30, 2018, the Company’s stock-based compensation cost was $3.6 million and $9.7 million, respectively, of which the Company capitalized $1.4 million and $3.9 million, respectively, relating to its exploration and development efforts. During the three and nine months ended September 30, 2017, the Company’s stock-based compensation cost was $2.8 million and $8.0 million, respectively, of which the Company capitalized $1.1 million and $3.2 million, respectively, relating to its exploration and development efforts.

The following table summarizes restricted stock activity for the nine months ended September 30, 2018:

	Number of Unvested Restricted Shares		Weighted Average Grant Date Fair Value
Unvested shares as of January 1, 2018	976,027		$	18.71
Granted	1,197,628		9.45
Vested	(618,202	)	17.77
Forfeited	(32,633	)	17.31
Unvested shares as of September 30, 2018	1,522,820		$	11.84

Unrecognized compensation expense as of September 30, 2018 related to restricted shares was $15.5 million. The expense is expected to be recognized over a weighted average period of 1.63 years.

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EARNINGS PER SHARE

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

EARNINGS PER SHARE

EARNINGS PER SHARE

Reconciliations of the components of basic and diluted net income per common share are presented in the tables below:

	Three months ended September 30,
	2018					2017
	Income		Shares	Per Share		Income		Shares	Per Share
	(In thousands, except share data)
Basic:
Net income	$	95,150	173,057,538	$	0.55	$	18,235	182,957,416	$	0.10
Effect of dilutive securities:
Stock options and awards	—		247,376			—		51,020
Diluted:
Net income	$	95,150	173,304,914	$	0.55	$	18,235	183,008,436	$	0.10

	Nine months ended September 30,
	2018					2017
	Income		Shares	Per Share		Income		Shares	Per Share
	(In thousands, except share data)
Basic:
Net income	$	296,559	175,776,312	$	1.69	$	278,626	178,736,569	$	1.56
Effect of dilutive securities:
Stock options and awards	—		664,149			—		394,001
Diluted:
Net income	$	296,559	176,440,461	$	1.68	$	278,626	179,130,570	$	1.56

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COMMITTMENTS AND CONTINGENCIES

9 Months Ended

Sep. 30, 2018

Commitments and Contingencies Disclosure [Abstract]

COMMITMENTS AND CONTINGENCIES

COMMITMENTS AND CONTINGENCIES

Plugging and Abandonment Funds

In connection with the Company’s acquisition in 1997 of the remaining 50% interest in its WCBB properties, the Company assumed the seller’s (Chevron) obligation to contribute approximately $18,000 per month through March 2004 to a plugging and abandonment trust and the obligation to plug a minimum of 20 wells per year for 20 years commencing March 11, 1997. Beginning in 2009, the Company could access the trust for use in plugging and abandonment charges associated with the property, although it has not yet done so. As of September 30, 2018, the plugging and abandonment trust totaled approximately $3.1 million. At September 30, 2018, the Company had plugged 555 wells at WCBB since it began its plugging program in 1997, which management believes fulfills its minimum plugging obligation.

Operating Leases

The Company leases office facilities under non-cancellable operating leases exceeding one year. Future minimum lease commitments under these leases at September 30, 2018 were as follows:

	(In thousands)
Remaining 2018	$	39
2019	144
2020	90
2021	38
Total	$	311

Firm Transportation and Sales Commitments

The Company had approximately 2,659,000 MMBtu per day of firm sales contracted with third parties. The table below presents these commitments at September 30, 2018 as follows:

	(MMBtu per day)
Remaining 2018	590,000
2019	659,000
2020	526,000
2021	372,000
2022	272,000
Thereafter	240,000
Total	2,659,000

The Company also had approximately $3.6 billion of firm transportation contracted with third parties. The table below presents these commitments at September 30, 2018 as follows:

	(In thousands)
Remaining 2018	$	62,012
2019	251,644
2020	247,581
2021	246,620
2022	246,620
Thereafter	2,511,853
Total	$	3,566,330

Other Commitments

Effective October 1, 2014, the Company entered into a Sand Supply Agreement with Muskie Proppant LLC (“Muskie”), a subsidiary of Mammoth Energy. Effective August 3, 2018, the Company extended the agreement through December 31, 2021. Pursuant to this agreement, as amended, the Company has agreed to purchase annual and monthly amounts of proppant sand subject to exceptions specified in the agreement at agreed pricing plus agreed costs and expenses. Failure by either Muskie or the Company to deliver or accept the minimum monthly amount results in damages calculated per ton based on the difference between the monthly obligation amount and the amount actually delivered or accepted, as applicable. The Company incurred $1.3 million and $1.5 million in non-utilization fees under this agreement during the three and nine months ended September 30, 2018, respectively. The Company did not incur any non-utilization fees during the nine months ended September 30, 2017.

Effective October 1, 2014, the Company entered into an Amended and Restated Master Services Agreement for pressure pumping services with Stingray Pressure Pumping LLC (“Stingray Pressure”), a subsidiary of Mammoth Energy. Pursuant to this agreement, as amended effective July 1, 2018, Stingray Pressure has agreed to provide hydraulic fracturing, stimulation and related completion and rework services to the Company and the Company has agreed to pay Stingray Pressure a monthly service fee plus the associated costs of the services provided. The Company has the right to suspend services of one crew and only one crew at any point in time without payment, fee or other obligation associated with the suspended crew, given appropriate notification of suspension.

Future minimum commitments under these agreements at September 30, 2018 are $154.2 million.

Litigation

In two separate complaints, one filed by the State of Louisiana and the Parish of Cameron in the 38th Judicial District Court for the Parish of Cameron on February 9, 2016 and the other filed by the State of Louisiana and the District Attorney for the 15^th Judicial District of the State of Louisiana in the 15^th Judicial District Court for the Parish of Vermilion on July 29, 2016, the Company was named as a defendant, among 26 oil and gas companies, in the Cameron Parish complaint and among more than 40 oil and gas companies in the Vermilion Parish complaint, or the Complaints. The Complaints were filed under the State and Local Coastal Resources Management Act of 1978, as amended, and the rules, regulations, orders and ordinances adopted thereunder, which the Company referred to collectively as the CZM Laws, and allege that certain of the defendants’ oil and gas exploration, production and transportation operations associated with the development of the East Hackberry and West Hackberry oil and gas fields, in the case of the Cameron Parish complaint, and the Tigre Lagoon and Lac Blanc oil and gas fields, in the case of the Vermilion Parish complaint, were conducted in violation of the CZM Laws. The Complaints allege that such activities caused substantial damage to land and waterbodies located in the coastal zone of the relevant Parish, including due to defendants’ design, construction and use of waste pits and the alleged failure to properly close the waste pits and to clear, re-vegetate, detoxify and return the property affected to its original condition, as well as the defendants’ alleged discharge of waste into the coastal zone. The Complaints also allege that the defendants’ oil and gas activities have resulted in the dredging of numerous canals, which had a direct and significant impact on the state coastal waters within the relevant Parish and that the defendants, among other things, failed to design, construct and maintain these canals using the best practical techniques to prevent bank slumping, erosion and saltwater intrusion and to minimize the potential for inland movement of storm-generated surges, which activities allegedly have resulted in the erosion of marshes and the degradation of terrestrial and aquatic life therein. The Complaints also allege that the defendants failed to re-vegetate, refill, clean, detoxify and otherwise restore these canals to their original condition. In these two petitions, the plaintiffs seek damages and other appropriate relief under the CZM Laws, including the payment of costs necessary to clear, re-vegetate, detoxify and otherwise restore the affected coastal zone of the relevant Parish to its original condition, actual restoration of such coastal zone to its original condition, and the payment of reasonable attorney fees and legal expenses and pre-judgment and post judgment interest.

The Company was served with the Cameron complaint in early May 2016 and with the Vermilion complaint in early September 2016.  The Louisiana Attorney General and the Louisiana Department of Natural Resources intervened in both the Cameron Parish suit and the Vermilion Parish suit.  Shortly after the Complaints were filed, certain defendants removed the cases to the United States District Court for the Western District of Louisiana.  In both cases, the plaintiffs filed motions to remand the lawsuits to state court, which were ultimately granted by the district courts.  However, on May 23, 2018, a group of defendants again removed the Cameron Parish and Vermilion Parish lawsuits to federal court.  In response, the plaintiffs again filed motions to remand the cases to state court. The removing defendants have opposed plaintiffs’ motions to remand. The motions to remand remain pending, and further action in the cases will be stayed until the courts rule on the motions to remand.  Also, shortly after the May 23, 2018 removal, the removing defendants filed motions with the United States Judicial Panel on Multidistrict Litigation (the “MDL Panel”) requesting that the Cameron Parish and Vermilion Parish lawsuits be consolidated with 40 similar lawsuits so that pre-trial proceedings in the cases could be coordinated.  The MDL Panel denied the motion to consolidate the lawsuits. Due to the procedural posture of lawsuits, the cases are still in their early stages and the parties have conducted very little discovery. As a result, the Company has not had the opportunity to evaluate the applicability of the allegations made in plaintiffs' complaints to the Company's operations and management cannot determine the amount of loss, if any, that may result.

In addition, due to the nature of the Company’s business, it is, from time to time, involved in routine litigation or subject to disputes or claims related to its business activities, including workers’ compensation claims and employment related disputes. In the opinion of the Company’s management, none of the pending litigation, disputes or claims against the Company, if decided adversely, will have a material adverse effect on its financial condition, cash flows or results of operations.

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DERIVATIVE INSTRUMENTS

9 Months Ended

Sep. 30, 2018

General Discussion of Derivative Instruments and Hedging Activities [Abstract]

DERIVATIVE INSTRUMENTS

DERIVATIVE INSTRUMENTS

Natural Gas, Oil and Natural Gas Liquids Derivative Instruments

The Company seeks to reduce its exposure to unfavorable changes in natural gas, oil and natural gas liquids ("NGLs") prices, which are subject to significant and often volatile fluctuation, by entering into over-the-counter fixed price swaps, basis swaps and various types of option contracts. These contracts allow the Company to predict with greater certainty the effective natural gas, oil and NGLs prices to be received for hedged production and benefit operating cash flows and earnings when market prices are less than the fixed prices provided in the contracts. However, the Company will not benefit from market prices that are higher than the fixed prices in the contracts for hedged production.

Fixed price swaps are settled monthly based on differences between the fixed price specified in the contract and the referenced settlement price. When the referenced settlement price is less than the price specified in the contract, the Company receives an amount from the counterparty based on the price difference multiplied by the volume. Similarly, when the referenced settlement price exceeds the price specified in the contract, the Company pays the counterparty an amount based on the price difference multiplied by the volume. The prices contained in these fixed price swaps are based on the NYMEX Henry Hub for natural gas, Argus Louisiana Light Sweet Crude for oil, the NYMEX West Texas Intermediate for oil, and Mont Belvieu for propane, pentane and ethane. Below is a summary of the Company’s open fixed price swap positions as of September 30, 2018.

	Location	Daily Volume (MMBtu/day)	Weighted Average Price
Remaining 2018	NYMEX Henry Hub	1,010,000	$	3.01
2019	NYMEX Henry Hub	1,154,000	$	2.81
2020	NYMEX Henry Hub	204,000	$	2.77

	Location	Daily Volume (Bbls/day)	Weighted Average Price
Remaining 2018	ARGUS LLS	2,000	$	56.22
2019	ARGUS LLS	1,000	$	59.55
Remaining 2018	NYMEX WTI	4,500	$	53.72
2019	NYMEX WTI	4,000	$	58.28

	Location	Daily Volume (Bbls/day)	Weighted Average Price
2019	Mont Belvieu C2	1,000	$	18.48
Remaining 2018	Mont Belvieu C3	4,000	$	29.34
2019	Mont Belvieu C3	4,000	$	28.87
Remaining 2018	Mont Belvieu C5	500	$	46.62
2019	Mont Belvieu C5	500	$	54.08

The Company sold call options and used the associated premiums to enhance the fixed price for a portion of the fixed price natural gas swaps listed above. Each short call option has an established ceiling price. When the referenced settlement price is above the price ceiling established by these short call options, the Company pays its counterparty an amount equal to the difference between the referenced settlement price and the price ceiling multiplied by the hedged contract volumes.

	Location	Daily Volume (MMBtu/day)	Weighted Average Price
October 2018 - March 2019	NYMEX Henry Hub	50,000	$	3.13
April 2019 - December 2019	NYMEX Henry Hub	30,000	$	3.10

For a portion of the natural gas fixed price swaps listed above, the counterparty has an option to extend the original terms an additional twelve months for the period January 2019 through December 2019. The option to extend the terms expires in December 2018. If executed, the Company would have additional fixed price swaps for 100,000 MMBtu per day at a weighted average price of $3.05 per MMBtu.

In addition, the Company entered into natural gas basis swap positions, which settle on the pricing index to basis differential of Transco Zone 4 to NYMEX Henry Hub natural gas price. As of September 30, 2018, the Company had the following natural gas basis swap positions for Transco Zone 4.

	Location	Daily Volume (MMBtu/day)	Weighted Average Price
Remaining 2018	Transco Zone 4	40,000	$	(0.05	)
2019	Transco Zone 4	60,000	$	(0.05	)
2020	Transco Zone 4	60,000	$	(0.05	)

Balance Sheet Presentation

The Company reports the fair value of derivative instruments on the consolidated balance sheets as derivative instruments under current assets, noncurrent assets, current liabilities and noncurrent liabilities on a gross basis. The Company determines the current and noncurrent classification based on the timing of expected future cash flows of individual trades. The following table presents the fair value of the Company’s derivative instruments on a gross basis at September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
	(In thousands)
Short-term derivative instruments - asset	$	19,809	$	78,847
Long-term derivative instruments - asset	$	3,530	$	8,685
Short-term derivative instruments - liability	$	62,601	$	32,534
Long-term derivative instruments - liability	$	15,101	$	2,989

Gains and Losses

The following table presents the gain and loss recognized in net (loss) gain on natural gas, oil and NGL derivatives in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017.

	Net (loss) gain on derivative instruments
	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
	(In thousands)
Natural gas derivatives	$	14,101		$	(7,077	)	$	(26,789	)	$	135,868
Oil derivatives	(11,610		)	(6,571		)	(45,176		)	12,477
Natural gas liquids derivatives	(12,154		)	(9,212		)	(24,772		)	(6,757		)
Total	$	(9,663	)	$	(22,860	)	$	(96,737	)	$	141,588

Offsetting of derivative assets and liabilities

As noted above, the Company records the fair value of derivative instruments on a gross basis. The following table presents the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value.

	As of September 30, 2018
	Gross Assets (Liabilities)			Gross Amounts
	Presented in the			Subject to Master			Net
	Consolidated Balance Sheets			Netting Agreements			Amount
	(In thousands)
Derivative assets	$	23,339		$	(17,053	)	$	6,286
Derivative liabilities	$	(77,702	)	$	17,053		$	(60,649	)

	As of December 31, 2017
	Gross Assets (Liabilities)			Gross Amounts
	Presented in the			Subject to Master			Net
	Consolidated Balance Sheets			Netting Agreements			Amount
	(In thousands)
Derivative assets	$	87,532		$	(22,199	)	$	65,333
Derivative liabilities	$	(35,523	)	$	22,199		$	(13,324	)

Concentration of Credit Risk

By using derivative instruments that are not traded on an exchange, the Company is exposed to the credit risk of its counterparties. Credit risk is the risk of loss from counterparties not performing under the terms of the derivative instrument. When the fair value of a derivative instrument is positive, the counterparty is expected to owe the Company, which creates credit risk. To minimize the credit risk in derivative instruments, it is the Company’s policy to enter into derivative contracts only with counterparties that are creditworthy financial institutions deemed by management as competent and competitive market makers. The Company’s derivative contracts are with multiple counterparties to lessen its exposure to any individual counterparty. Additionally, the Company uses master netting agreements to minimize credit risk exposure. The creditworthiness of the Company’s counterparties is subject to periodic review. None of the Company’s derivative instrument contracts contain credit-risk related contingent features. Other than as provided by the Company’s revolving credit facility, the Company is not required to provide credit support or collateral to any of its counterparties under its derivative instruments, nor are the counterparties required to provide credit support to the Company.

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FAIR VALUE MEASUREMENTS

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS

The Company records certain financial and non-financial assets and liabilities on the balance sheet at fair value in accordance with ASC 820, Fair Value Measurement and Disclosures (“ASC 820”). ASC 820 defines fair value as the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. The statement establishes market or observable inputs as the preferred sources of values, followed by assumptions based on hypothetical transactions in the absence of market inputs. The statement requires fair value measurements be classified and disclosed in one of the following categories:

Level 1 – Quoted prices in active markets for identical assets and liabilities.

Level 2 – Quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable or whose significant value drivers are observable.

Level 3 – Significant inputs to the valuation model are unobservable.

Valuation techniques that maximize the use of observable inputs are favored. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The assessment of the 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.

The following tables summarize the Company’s financial and non-financial assets and liabilities by ASC 820 valuation level as of September 30, 2018 and December 31, 2017:

	September 30, 2018
	Level 1		Level 2		Level 3
	(In thousands)
Assets:
Derivative Instruments	$	—	$	23,339	$	—
Liabilities:
Derivative Instruments	$	—	$	77,702	$	—

	December 31, 2017
	Level 1		Level 2		Level 3
	(In thousands)
Assets:
Derivative Instruments	$	—	$	87,532	$	—
Liabilities:
Derivative Instruments	$	—	$	35,523	$	—

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 estimated fair values of proved oil and natural gas properties assumed in business combinations are based on a discounted cash flow model and market assumptions as to future commodity prices, projections of estimated quantities of oil and natural gas reserves, expectations for timing and amount of future development and operating costs, projections of future rates of production, expected recovery rates and risk-adjusted discount rates. The estimated fair values of unevaluated oil and natural gas properties was based on geological studies, historical well performance, location and applicable mineral lease terms. Based on the unobservable nature of certain of the inputs, the estimated fair value of the oil and gas properties assumed is deemed to use Level 3 inputs. The asset retirement obligations assumed as part of the business combination were estimated using the same assumptions and methodology as described below. See Note 1 for further discussion of the Vitruvian Acquisition.

The Company estimates asset retirement obligations pursuant to the provisions of ASC Topic 410, Asset Retirement and Environmental Obligations (“ASC 410”). The 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 2 for further discussion of the Company’s asset retirement obligations. Asset retirement obligations incurred during the nine months ended September 30, 2018 were approximately $1.5 million.

The fair value of the common stock received from Mammoth Energy in connection with the Company’s contribution of all of its membership interests in Sturgeon, Stingray Energy and Stingray Cementing was estimated using Level 1 inputs, as the price per share was a quoted price in an active market for identical Mammoth Energy common shares.

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FAIR VALUE OF FINANCIAL INSTRUMENTS

9 Months Ended

Sep. 30, 2018

Investments, All Other Investments [Abstract]

FAIR VALUE OF FINANCIAL INSTRUMENTS

FAIR VALUE OF FINANCIAL INSTRUMENTS

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

At September 30, 2018, the carrying value of the outstanding debt represented by the Notes was approximately $2.0 billion, including the unamortized debt issuance cost of approximately $4.6 million related to the 2023 Notes, approximately $9.0 million related to the 2024 Notes, approximately $12.9 million related to the 2025 Notes and approximately $5.2 million related to the 2026 Notes. Based on the quoted market price, the fair value of the Notes was determined to be approximately $2.0 billion at September 30, 2018.

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REVENUE FROM CONTRACTS WITH CUSTOMERS

9 Months Ended

Sep. 30, 2018

Revenue from Contract with Customer [Abstract]

REVENUE FROM CONTRACTS WITH CUSTOMERS

REVENUE FROM CONTRACTS WITH CUSTOMERS

Revenue Recognition

On January 1, 2018, the Company adopted Accounting Standards Update ("ASU") No. 2014-09, Revenue from Contracts with Customers ("ASC 606") using the modified retrospective transition applied to contracts that were not completed as of that date. The adoption did not result in a material change in the Company’s accounting or have a material effect on the Company’s financial position, including measurement of revenue, the timing of revenue recognition and the recognition of contract assets, liabilities and related costs. For periods through December 31, 2017, the Company accounted for its revenue using ASC 605, Revenue Recognition.

The Company’s revenues are primarily derived from the sale of natural gas, oil and condensate and NGLs. Sales of natural gas, oil and condensate and NGLs 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 a point-in-time once control of the product has been transferred to the customer. The Company considers a variety of facts and circumstances in assessing the point of control transfer, including but not limited to (i) whether the purchaser can direct the use of the product, (ii) the transfer of significant risks, (iii) the Company’s right to payment and (iv) transfer of legal title.

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 is based on pricing tied to market indices and volumes delivered in the current month. As such, this market pricing may be constrained (i.e., not estimable) at the inception of the contract but will be recognized based on the applicable market pricing, which will be known upon transfer of the goods to the customer. The payment date is usually within 30 days of the end of the calendar month in which the commodity is delivered.

The recognition of gains or losses on derivative instruments is outside the scope of ASC 606 and is not considered revenue from contracts with customers subject to ASC 606. The Company may use financial or physical contracts accounted for as derivatives as economic hedges to manage price risk associated with normal sales, or in limited cases may use them for contracts the Company intends to physically settle but do not meet all of the criteria to be treated as normal sales.

The Company has elected to exclude from the measurement of the transaction price all taxes assessed by governmental authorities that are both imposed on and concurrent with a specific revenue-producing transaction and collected by the Company from a customer, such as sales tax, use tax, value-added tax and similar taxes.

Transaction Price Allocated to Remaining Performance Obligations

A significant number of the Company's product sales are short-term in nature generally through evergreen contracts with contract terms of one year or less. These contracts typically automatically renew under the same provisions. For those contracts, the Company has utilized the practical expedient allowed in the new revenue accounting standard that exempts the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.

For product sales that have a contract term greater than one year, the Company has utilized the practical expedient that exempts the Company from disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these sales contracts, each unit of product generally represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. Currently, the Company's product sales that have a contractual term greater than one year have no long-term fixed consideration.

Contract Balances

Receivables from contracts with customers are recorded when the right to consideration becomes unconditional, generally when control of the product has been transferred to the customer. Receivables from contracts with customers were $157.4 million and $146.8 million as of September 30, 2018 and December 31, 2017, respectively, and are reported in accounts receivable - oil and natural gas sales on the consolidated balance sheet. The Company currently has no assets or liabilities related to its revenue contracts, including no upfront or rights to deficiency payments.

Contract Modifications

For contracts modified prior to the beginning of the earliest reporting period presented under ASC 606, the Company has elected to reflect the aggregate of the effect of all modifications that occurred before the beginning of the earliest period presented under the new standard when identifying the satisfied and unsatisfied performance obligations, determining the transaction price and allocating the transaction price to the satisfied and unsatisfied performance obligations for the modified contracts at transition.

Prior-Period Performance Obligations

The Company records revenue in the month production is delivered to the purchaser. However, settlement statements for certain gas and NGLs sales may be received for 30 to 90 days after the date production is delivered, and as a result, the Company is required to estimate the amount of production that was delivered to the purchaser and the price that will be received for the sale of the product. The differences between the estimates and the actual amounts for product sales is recorded in the month that payment is received from the purchaser. The Company has internal controls in place for the estimation process and any identified differences between revenue estimates and actual revenue received historically have not been significant. For the nine months ended September 30, 2018, revenue recognized in the reporting period related to performance obligations satisfied in prior reporting periods was not material.

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INCOME TAXES

9 Months Ended

Sep. 30, 2018

Income Tax Disclosure [Abstract]

INCOME TAXES

INCOME TAXES

The Company records its quarterly tax provision based on an estimate of the annual effective tax rate expected to apply to continuing operations for the various jurisdictions in which it operates. The tax effects of certain items, such as tax rate changes, significant unusual or infrequent items, and certain changes in the assessment of the realizability of deferred taxes, are recognized as discrete items in the period in which they occur and are excluded from the estimated annual effective tax rate.

For the three and nine months ended September 30, 2018, the Company's estimated annual effective tax rate remained nominal as a result of the full valuation allowance on deferred tax assets. Based on the Company's estimated results for the year ending December 31, 2018, the Company anticipates remaining in a net deferred tax asset position. Based on the available positive and negative evidence, the Company expects to maintain a full valuation allowance as it cannot objectively assert that the deferred tax assets are more likely than not to be realized. A significant piece of negative evidence is the cumulative loss incurred over the three year period ending September 30, 2018. However, given the Company's current earnings and anticipated future earnings, it believes that there is a reasonable possibility that within the next 12 months sufficient positive evidence regarding recent cumulative income may become available, which may allow it to reach a conclusion that a significant portion of the valuation allowance will no longer be needed. Release of the valuation allowance would result in the recognition of certain net deferred tax assets and a decrease to income tax expense for the period the release is recorded. However, the exact timing and amount of any potential valuation allowance release is subject to change based on the levels of profitability that the Company is able to actually achieve.

On December 22, 2017, the President of the United States signed into law Public Law No. 115-97, a comprehensive tax reform bill commonly referred to as the Tax Cuts and Jobs Act ("Tax Act") that significantly reformed the Internal Revenue Code of 1986, as amended.  The Tax Act substantially revised numerous areas of U.S. federal income tax law, including reducing the maximum corporate income tax rate from 35% to 21%, allowing for full expensing of certain capital expenditures, modifying the limitations on the utilization of net operating losses, and repealing the corporate alternative minimum tax.  The various estimates included in determining the Company's tax provision as of December 31, 2017 remain provisional through the nine months ended September 30, 2018 and may be adjusted through subsequent events such as the filing of its 2017 consolidated federal income tax return and the issuance of additional guidance from the Internal Revenue Service or from state tax authorities.  There were no material changes to the provisional estimates during the quarter ended September 30, 2018.

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CONDENSED CONSOLIDATING FINANCIAL INFORMATION

9 Months Ended

Sep. 30, 2018

Condensed Financial Information Disclosure [Abstract]

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

CONDENSED CONSOLIDATING FINANCIAL INFORMATION

On April 21, 2015, the Company issued $350.0 million in aggregate principal amount of the 2023 Notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. In connection with the 2023 Notes Offering, the Company and its subsidiary guarantors entered into a registration rights agreement, dated as of April 21, 2015, pursuant to which the Company agreed to file a registration statement with respect to an offer to exchange the 2023 Notes for a new issue of substantially identical debt securities registered under the Securities Act. The exchange offer for the 2023 Notes was completed on October 13, 2015.

On October 14, 2016, the Company issued $650.0 million in aggregate principal amount of the 2024 Notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The net proceeds from the issuance of the 2024 Notes, together with cash on hand, were used to repurchase or redeem all of the then-outstanding 2020 Notes in October 2016.

On December 21, 2016, the Company issued $600.0 million in aggregate principal amount of the 2025 Notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. The Company used the net proceeds from the issuance of the 2025 Notes, together with the net proceeds from the December 2016 underwritten offering of the Company’s common stock and cash on hand, to fund the cash portion of the purchase price for the Vitruvian Acquisition.

In connection with the 2024 Notes and the 2025 Notes Offerings, the Company and its subsidiary guarantors entered into two registration rights agreements, pursuant to which the Company agreed to file a registration statement with respect to offers to exchange the 2024 Notes and the 2025 Notes for new issues of substantially identical debt securities registered under the Securities Act. The exchange offers for the 2024 Notes and the 2025 Notes were completed on September 13, 2017.

On October 11, 2017, the Company issued $450.0 million in aggregate principal amount of the 2026 Notes to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. A portion of the net proceeds from the issuance of the 2026 Notes was used to repay all of the Company's outstanding borrowings under its secured revolving credit facility on October 11, 2017 and the balance was used to fund the remaining outspend related to the Company's 2017 capital development plans.

In connection with the 2026 Notes offering, the Company and its subsidiary guarantors entered into a registration rights agreement pursuant to which the Company agreed to file a registration statement with respect to an offer to exchange the 2026 Notes for a new issue of substantially identical debt securities registered under the Securities Act. On January 18, 2018, the Company filed a registration statement on Form S-4 with respect to an offer to exchange the 2026 Notes for substantially identical debt securities registered under the Securities Act, which registration statement was declared effective by the SEC on February 12, 2018. The exchange offer relating to the 2026 notes closed on March 22, 2018.

The 2023 Notes, the 2024 Notes, the 2025 Notes and the 2026 Notes are guaranteed on a senior unsecured basis by all existing consolidated subsidiaries that guarantee the Company’s secured revolving credit facility or certain other debt (the “Guarantors”). The 2023 Notes, the 2024 Notes, the 2025 Notes and the 2026 Notes are not guaranteed by Grizzly Holdings, Inc. (the “Non-Guarantor”). The Guarantors are 100% owned by Gulfport (the “Parent”), and the guarantees are full, unconditional, joint and several. There are no significant restrictions on the ability of the Parent or the Guarantors to obtain funds from each other in the form of a dividend or loan.

The following condensed consolidating balance sheets, statements of operations, statements of comprehensive income and statements of cash flows are provided for the Parent, the Guarantors and the Non-Guarantor and include the consolidating adjustments and eliminations necessary to arrive at the information for the Company on a condensed consolidated basis. The information has been presented using the equity method of accounting for the Parent’s ownership of the Guarantors and the Non-Guarantor.

CONDENSED CONSOLIDATING BALANCE SHEETS

(Amounts in thousands)

	September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	89,214		$	35,357		$	—		$	—		$	124,571
Accounts receivable - oil and natural gas sales	111,463			45,928			—			—			157,391
Accounts receivable - joint interest and other	19,066			20,445			—			—			39,511
Accounts receivable - related parties	79			—			—			—			79
Accounts receivable - intercompany	662,319			240,373			—			(902,692		)	—
Prepaid expenses and other current assets	7,521			2,221			—			—			9,742
Short-term derivative instruments	19,809			—			—			—			19,809
Total current assets	909,471			344,324			—			(902,692		)	351,103
Property and equipment:
Oil and natural gas properties, full-cost accounting	7,003,396			2,934,047			—			(729		)	9,936,714
Other property and equipment	91,637			751			—			—			92,388
Accumulated depletion, depreciation, amortization and impairment	(4,506,267		)	(39		)	—			—			(4,506,306		)
Property and equipment, net	2,588,766			2,934,759			—			(729		)	5,522,796
Other assets:
Equity investments and investments in subsidiaries	2,723,140			—			53,380			(2,543,991		)	232,529
Long-term derivative instruments	3,530			—			—			—			3,530
Inventories	6,800			1,434			—			—			8,234
Other assets	13,018			4,020			—			—			17,038
Total other assets	2,746,488			5,454			53,380			(2,543,991		)	261,331
Total assets	$	6,244,725		$	3,284,537		$	53,380		$	(3,447,412	)	$	6,135,230
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	464,426		$	118,038		$	—		$	—		$	582,464
Accounts payable - intercompany	240,310			662,254			128			(902,692		)	—
Asset retirement obligation - current	120			—			—			—			120
Short-term derivative instruments	62,601			—			—			—			62,601
Current maturities of long-term debt	647			—			—			—			647
Total current liabilities	768,104			780,292			128			(902,692		)	645,832
Long-term derivative instruments	15,101			—			—			—			15,101
Asset retirement obligation - long-term	65,634			12,777			—			—			78,411
Deferred tax liability	3,046			—			—			—			3,046
Long-term debt, net of current maturities	2,100,825			—			—			—			2,100,825
Total liabilities	2,952,710			793,069			128			(902,692		)	2,843,215
Stockholders’ equity:
Common stock	1,732			—			—			—			1,732
Paid-in capital	4,316,006			1,915,598			261,626			(2,177,224		)	4,316,006
Accumulated other comprehensive (loss) income	(46,354		)	—			(44,338		)	44,338			(46,354		)
Retained (deficit) earnings	(979,369		)	575,870			(164,036		)	(411,834		)	(979,369		)
Total stockholders’ equity	3,292,015			2,491,468			53,252			(2,544,720		)	3,292,015
Total liabilities and stockholders’ equity	$	6,244,725		$	3,284,537		$	53,380		$	(3,447,412	)	$	6,135,230

CONDENSED CONSOLIDATING BALANCE SHEETS

(Amounts in thousands)

	December 31, 2017
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	67,908		$	31,649		$	—		$	—		$	99,557
Accounts receivable - oil and natural gas sales	112,686			34,087			—			—			146,773
Accounts receivable - joint interest and other	15,435			20,005			—			—			35,440
Accounts receivable - intercompany	554,439			63,374			—			(617,813		)	—
Prepaid expenses and other current assets	4,719			193			—			—			4,912
Short-term derivative instruments	78,847			—			—			—			78,847
Total current assets	834,034			149,308			—			(617,813		)	365,529
Property and equipment:
Oil and natural gas properties, full-cost accounting,	6,562,147			2,607,738			—			(729		)	9,169,156
Other property and equipment	86,711			43			—			—			86,754
Accumulated depletion, depreciation, amortization and impairment	(4,153,696		)	(37		)	—			—			(4,153,733		)
Property and equipment, net	2,495,162			2,607,744			—			(729		)	5,102,177
Other assets:
Equity investments and investments in subsidiaries	2,361,575			77,744			57,641			(2,194,848		)	302,112
Long-term derivative instruments	8,685			—			—			—			8,685
Deferred tax asset	1,208			—			—			—			1,208
Inventories	5,816			2,411			—			—			8,227
Other assets	12,483			7,331			—			—			19,814
Total other assets	2,389,767			87,486			57,641			(2,194,848		)	340,046
Total assets	$	5,718,963		$	2,844,538		$	57,641		$	(2,813,390	)	$	5,807,752
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	416,249		$	137,361		$	—		$	(1	)	$	553,609
Accounts payable - intercompany	63,373			554,313			127			(617,813		)	—
Asset retirement obligation - current	120			—			—			—			120
Short-term derivative instruments	32,534			—			—			—			32,534
Current maturities of long-term debt	622			—			—			—			622
Total current liabilities	512,898			691,674			127			(617,814		)	586,885
Long-term derivative instruments	2,989			—			—			—			2,989
Asset retirement obligation - long-term	63,141			11,839			—			—			74,980
Other non-current liabilities	—			2,963			—			—			2,963
Long-term debt, net of current maturities	2,038,321			—			—			—			2,038,321
Total liabilities	2,617,349			706,476			127			(617,814		)	2,706,138
Stockholders’ equity:
Common stock	1,831			—			—			—			1,831
Paid-in capital	4,416,250			1,915,598			259,307			(2,174,905		)	4,416,250
Accumulated other comprehensive (loss) income	(40,539		)	—			(38,593		)	38,593			(40,539		)
Retained (deficit) earnings	(1,275,928		)	222,464			(163,200		)	(59,264		)	(1,275,928		)
Total stockholders’ equity	3,101,614			2,138,062			57,514			(2,195,576		)	3,101,614
Total liabilities and stockholders’ equity	$	5,718,963		$	2,844,538		$	57,641		$	(2,813,390	)	$	5,807,752

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Three months ended September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	235,683		$	125,279		$	—		$	—		$	360,962
Costs and expenses:
Lease operating expenses	16,502			5,823			—			—			22,325
Production taxes	4,505			4,843			—			—			9,348
Midstream gathering and processing	54,397			24,516			—			—			78,913
Depreciation, depletion and amortization	119,914			1			—			—			119,915
General and administrative	16,314			(467		)	1			—			15,848
Accretion expense	812			225			—			—			1,037
	212,444			34,941			1			—			247,386
INCOME (LOSS) FROM OPERATIONS	23,239			90,338			(1		)	—			113,576
OTHER (INCOME) EXPENSE:
Interest expense	34,254			(1,001		)	—			—			33,253
Interest income	(86		)	(6		)	—			—			(92		)
Litigation settlement	917			—			—			—			917
Gain on sale of equity method investments	(2,733		)	—			—			—			(2,733		)
(Income) loss from equity method investments and investments in subsidiaries	(104,226		)	(1		)	275			91,094			(12,858		)
Other income	(37		)	(24		)	—			—			(61		)
	(71,911		)	(1,032		)	275			91,094			18,426
INCOME (LOSS) BEFORE INCOME TAXES	95,150			91,370			(276		)	(91,094		)	95,150
INCOME TAX BENEFIT	—			—			—			—			—
NET INCOME (LOSS)	$	95,150		$	91,370		$	(276	)	$	(91,094	)	$	95,150

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Three months ended September 30, 2017
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	188,390		$	77,108		$	—		$	—		$	265,498
Costs and expenses:
Lease operating expenses	16,019			4,001			—			—			20,020
Production taxes	4,052			1,367			—			—			5,419
Midstream gathering and processing	52,725			16,647			—			—			69,372
Depreciation, depletion and amortization	106,649			1			—			—			106,650
General and administrative	13,956			(892		)	1			—			13,065
Accretion expense	335			121			—			—			456
Acquisition expense	(5		)	38			—			—			33
	193,731			21,283			1			—			215,015
(LOSS) INCOME FROM OPERATIONS	(5,341		)	55,825			(1		)	—			50,483
OTHER (INCOME) EXPENSE:
Interest expense	27,914			(784		)	—			—			27,130
Interest income	(29		)	(8		)	—			—			(37		)
(Income) loss from equity method investments and investments in subsidiaries	(53,880		)	128			296			56,193			2,737
Other income	(344		)	(1		)	—			—			(345		)
	(26,339		)	(665		)	296			56,193			29,485
INCOME (LOSS) BEFORE INCOME TAXES	20,998			56,490			(297		)	(56,193		)	20,998
INCOME TAX EXPENSE	2,763			—			—			—			2,763
NET INCOME (LOSS)	$	18,235		$	56,490		$	(297	)	$	(56,193	)	$	18,235

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Nine months ended September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	596,018		$	343,076		$	—		$	—		$	939,094
Costs and expenses:
Lease operating expenses	46,926			17,217			—			—			64,143
Production taxes	13,309			10,552			—			—			23,861
Midstream gathering and processing	152,605			61,941			—			—			214,546
Depreciation, depletion, and amortization	352,846			2			—			—			352,848
General and administrative	45,100			(2,148		)	3			—			42,955
Accretion expense	2,397			659			—			—			3,056
	613,183			88,223			3			—			701,409
(LOSS) INCOME FROM OPERATIONS	(17,165		)	254,853			(3		)	—			237,685
OTHER (INCOME) EXPENSE:
Interest expense	103,310			(2,388		)	—			—			100,922
Interest income	(144		)	(18		)	—			—			(162		)
Litigation settlement	917			—			—			—			917
Insurance proceeds	(231		)	—			—			—			(231		)
Gain on sale of equity method investments	(28,349		)	(96,419		)	—			—			(124,768		)
(Income) loss from equity method investments and investments in subsidiaries	(387,991		)	(694		)	833			352,570			(35,282		)
Other (income) expense	(1,167		)	(34		)	—			1,000			(201		)
	(313,655		)	(99,553		)	833			353,570			(58,805		)
INCOME (LOSS) BEFORE INCOME TAXES	296,490			354,406			(836		)	(353,570		)	296,490
INCOME TAX BENEFIT	(69		)	—			—			—			(69		)
NET INCOME (LOSS)	$	296,559		$	354,406		$	(836	)	$	(353,570	)	$	296,559

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Nine months ended September 30, 2017
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	710,184		$	212,271		$	—		$	—		$	922,455
Costs and expenses:
Lease operating expenses	49,891			10,153			—			—			60,044
Production taxes	10,799			3,665			—			—			14,464
Midstream gathering and processing	132,740			43,518			—			—			176,258
Depreciation, depletion, and amortization	254,884			3			—			—			254,887
General and administrative	39,882			(1,963		)	3			—			37,922
Accretion expense	908			240			—			—			1,148
Acquisition expense	—			2,391			—			—			2,391
	489,104			58,007			3			—			547,114
INCOME (LOSS) FROM OPERATIONS	221,080			154,264			(3		)	—			375,341
OTHER (INCOME) EXPENSE:
Interest expense	79,095			(4,298		)	—			—			74,797
Interest income	(913		)	(14		)	—			—			(927		)
Gain on sale of equity method investments	(12,523		)	—			—			—			(12,523		)
(Income) loss from equity method investments and investments in subsidiaries	(124,446		)	2,586			869			154,459			33,468
Other (income) expense	(1,522		)	(241		)	—			900			(863		)
	(60,309		)	(1,967		)	869			155,359			93,952
INCOME (LOSS) BEFORE INCOME TAXES	281,389			156,231			(872		)	(155,359		)	281,389
INCOME TAX EXPENSE	2,763			—			—			—			2,763
NET INCOME (LOSS)	$	278,626		$	156,231		$	(872	)	$	(155,359	)	$	278,626

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Amounts in thousands)

	Three months ended September 30, 2018
	Parent		Guarantors		Non-Guarantor			Eliminations			Consolidated
Net income (loss)	$	95,150	$	91,370	$	(276	)	$	(91,094	)	$	95,150
Foreign currency translation adjustment	3,052		103		2,949			(3,052		)	3,052
Other comprehensive income (loss)	3,052		103		2,949			(3,052		)	3,052
Comprehensive income (loss)	$	98,202	$	91,473	$	2,673		$	(94,146	)	$	98,202

	Three months ended September 30, 2017
	Parent		Guarantors		Non-Guarantor			Eliminations			Consolidated
Net income (loss)	$	18,235	$	56,490	$	(297	)	$	(56,193	)	$	18,235
Foreign currency translation adjustment	6,832		158		6,674			(6,832		)	6,832
Other comprehensive income (loss)	6,832		158		6,674			(6,832		)	6,832
Comprehensive income (loss)	$	25,067	$	56,648	$	6,377		$	(63,025	)	$	25,067

	Nine months ended September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Net income (loss)	$	296,559		$	354,406		$	(836	)	$	(353,570	)	$	296,559
Foreign currency translation adjustment	(5,815		)	(70		)	(5,745		)	5,815			(5,815		)
Other comprehensive (loss) income	(5,815		)	(70		)	(5,745		)	5,815			(5,815		)
Comprehensive income (loss)	$	290,744		$	354,336		$	(6,581	)	$	(347,755	)	$	290,744

	Nine months ended September 30, 2017
	Parent		Guarantors		Non-Guarantor			Eliminations			Consolidated
Net income (loss)	$	278,626	$	156,231	$	(872	)	$	(155,359	)	$	278,626
Foreign currency translation adjustment	12,719		232		12,487			(12,719		)	12,719
Other comprehensive income (loss)	12,719		232		12,487			(12,719		)	12,719
Comprehensive income (loss)	$	291,345	$	156,463	$	11,615		$	(168,078	)	$	291,345

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	Nine months ended September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	416,833		$	192,123		$	(1	)	$	1		$	608,956
Net cash (used in) provided by investing activities	(344,330		)	(188,415		)	(2,318		)	2,318			(532,745		)
Net cash (used in) provided by financing activities	(51,197		)	—			2,319			(2,319		)	(51,197		)
Net increase in cash, cash equivalents and restricted cash	21,306			3,708			—			—			25,014
Cash, cash equivalents and restricted cash at beginning of period	67,908			31,649			—			—			99,557
Cash, cash equivalents and restricted cash at end of period	$	89,214		$	35,357		$	—		$	—		$	124,571

	Nine months ended September 30, 2017
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	310,624		$	181,108		$	(1	)	$	2		$	491,733
Net cash (used in) provided by investing activities	(2,034,554		)	(1,554,063		)	(1,843		)	1,408,980			(2,181,480		)
Net cash provided by (used in) financing activities	354,143			1,407,137			1,845			(1,408,982		)	354,143
Net (decrease) increase in cash, cash equivalents and restricted cash	(1,369,787		)	34,182			1			—			(1,335,604		)
Cash, cash equivalents and restricted cash at beginning of period	1,458,882			1,993			—			—			1,460,875
Cash, cash equivalents and restricted cash at end of period	$	89,095		$	36,175		$	1		$	—		$	125,271

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RECENT ACCOUNTING PRONOUNCEMENTS

9 Months Ended

Sep. 30, 2018

Accounting Changes and Error Corrections [Abstract]

RECENT ACCOUNTING PRONOUNCEMENTS

RECENT ACCOUNTING PRONOUNCEMENTS

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASC 606. ASC 606 supersedes existing industry specific revenue recognition guidance and increases disclosure requirements. The core principle of the new standard is for the recognition of revenue to depict the transfer of goods or services to customers in amounts that reflect the payment to which the company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method applied to contracts that were not completed as of that date. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard. Under the modified retrospective method, the Company recognizes the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings; however, no adjustment was required as a result of adopting the new revenue standard. The comparative information has not been restated and continues to be reported under the historic accounting standards in effect for those periods. The impact of the adoption of the new revenue standard is not expected to be material to the Company’s net income on an ongoing basis.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard supersedes the previous lease guidance by requiring lessees to recognize a right-to-use asset and lease liability on the balance sheet for all leases with lease terms of greater than one year while maintaining substantially similar classifications for financing and operating leases. The guidance is effective for periods after December 15, 2018, and the Company will not early adopt. The Company expects to apply the transition method permitted by ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, issued in August 2018, which permits an entity to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption with no adjustment made to the comparative periods presented in the consolidated financial statements. The Company also expects to utilize the practical expedient provided by ASU 2018-11 to not separate non-lease components from the associated lease component and, instead, to account for those components as a single component if the non-lease components would be accounted for under ASC 606 and other conditions are met.

The Company has identified its portfolio of leased assets under the new standard and is in the process of evaluating the impact of this guidance on its consolidated financial statements and related disclosures. The adoption will increase asset and liability balances on the consolidated balance sheets due to the required recognition of right-of-use assets and corresponding lease liabilities; however, that impact is currently not known. The Company is in the process of designing processes and controls needed to comply with the requirements of the new standard, which includes the implementation of a lease accounting software solution to support lease portfolio management and accounting and disclosures.

Additionally, in January 2018, the FASB issued ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842. The amendments in this update provide an optional expedient to not evaluate existing or expired land easements that were not previously accounted for under current leases guidance in Topic 840. An entity that elects this practical expedient should evaluate new or modified land easements beginning at the date of adoption. The Company does not currently account for any land easements under Topic 840 and plans to utilize this practical expedient in conjunction with the adoption of ASU 2016-02.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this ASU eliminates the probable initial recognition threshold in current GAAP and instead, requires an entity to reflect its current estimate of all expected credit losses. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposure, reinsurance receivables and any other financial assets not excluded from the scope that have the contractual right to receive cash. The guidance is effective for periods after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its financial statements and related disclosures and does not anticipate it to have a material effect.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. This ASU clarifies how certain cash receipts and cash payments should be classified and presented in the statement of cash flows. The Company adopted this standard in the first quarter of 2018 and has made an accounting policy election to classify distributions received from equity method investees using the nature of the distribution approach, which classifies distributions received from investees as either cash inflows from operating activities or cash inflows from investing activities in the statement of cash flows based on the nature of the activities of the investee that generated the distribution. The impact of adopting this ASU was not material to prior periods presented.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU requires that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows and to provide a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet when the cash, cash equivalents, restricted cash, and restricted cash equivalents are presented in more than one line item on the balance sheet. The Company adopted this standard in the first quarter of 2018 using the retrospective transition method. The adoption of this standard had no impact on the statement of cash flows for the nine months ended September 30, 2018 and resulted in the addition of $185.0 million of restricted cash to the beginning cash balance and an increase to net cash used in investing activities by the same amount on the statement of cash flows for the nine months ended September 30, 2017.

In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business. Under the current business combination guidance, there are three elements of a business: inputs, processes and outputs. The revised guidance adds an initial screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets. If that screen is met, the set of assets is not a business. The new framework also specifies the minimum required inputs and processes necessary to be a business. The Company adopted this standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures.

In February 2018, the FASB issued ASU No. 2018-02, Income statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for standard tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendment will be effective for reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently assessing the impact of the ASU on its consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurementwhich removes, modifies, and adds certain disclosure requirements on fair value measurements. The amendment will be effective for reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is currently assessing the impact of the ASU on its consolidated financial statements and related disclosures.

In August 2018, the FASB also issued ASU No. 2018-15 , Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for costs associated with implementing a cloud computing arrangement in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software. The amendment will be effective for reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is currently assessing the impact of the ASU on its consolidated financial statements and related disclosures.

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SUBSEQUENT EVENTS

9 Months Ended

Sep. 30, 2018

Subsequent Events [Abstract]

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS

At September 30, 2018, accounts receivable-related parties totaled $79,000 and represented personal charges made by the former chief executive officer of the Company on his Company credit card.  These charges were paid in full in October 2018 and no personal charges are currently outstanding.

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RECENT ACCOUNTING PRONOUNCEMENTS (Policies)

9 Months Ended

Sep. 30, 2018

Accounting Changes and Error Corrections [Abstract]

Consolidation, variable interest entity, policy

The Company accounts for its investment in these VIEs following the equity method of accounting. The carrying amounts of the Company’s equity investments are classified as other non-current assets on the accompanying consolidated balance sheets. The Company’s maximum exposure to loss as a result of its involvement with these VIEs is based on the Company’s capital contributions and the economic performance of the VIEs, and is equal to the carrying value of the Company’s investments which is the maximum loss the Company could be required to record in the consolidated statements of operations. See Note 3 for further discussion of these entities, including the carrying amounts of each investment.

Recent accounting pronouncements

In May 2014, the Financial Accounting Standards Board (“FASB”) issued ASC 606. ASC 606 supersedes existing industry specific revenue recognition guidance and increases disclosure requirements. The core principle of the new standard is for the recognition of revenue to depict the transfer of goods or services to customers in amounts that reflect the payment to which the company expects to be entitled in exchange for those goods or services. The Company adopted ASC 606 as of January 1, 2018 using the modified retrospective transition method applied to contracts that were not completed as of that date. Results for reporting periods beginning after January 1, 2018 are presented under the new revenue standard. Under the modified retrospective method, the Company recognizes the cumulative effect of initially applying the new revenue standard as an adjustment to the opening balance of retained earnings; however, no adjustment was required as a result of adopting the new revenue standard. The comparative information has not been restated and continues to be reported under the historic accounting standards in effect for those periods. The impact of the adoption of the new revenue standard is not expected to be material to the Company’s net income on an ongoing basis.

In February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842). The standard supersedes the previous lease guidance by requiring lessees to recognize a right-to-use asset and lease liability on the balance sheet for all leases with lease terms of greater than one year while maintaining substantially similar classifications for financing and operating leases. The guidance is effective for periods after December 15, 2018, and the Company will not early adopt. The Company expects to apply the transition method permitted by ASU No. 2018-11, Leases (Topic 842): Targeted Improvements, issued in August 2018, which permits an entity to recognize a cumulative-effect adjustment to the opening balance of retained earnings in the period of adoption with no adjustment made to the comparative periods presented in the consolidated financial statements. The Company also expects to utilize the practical expedient provided by ASU 2018-11 to not separate non-lease components from the associated lease component and, instead, to account for those components as a single component if the non-lease components would be accounted for under ASC 606 and other conditions are met.

The Company has identified its portfolio of leased assets under the new standard and is in the process of evaluating the impact of this guidance on its consolidated financial statements and related disclosures. The adoption will increase asset and liability balances on the consolidated balance sheets due to the required recognition of right-of-use assets and corresponding lease liabilities; however, that impact is currently not known. The Company is in the process of designing processes and controls needed to comply with the requirements of the new standard, which includes the implementation of a lease accounting software solution to support lease portfolio management and accounting and disclosures.

Additionally, in January 2018, the FASB issued ASU No. 2018-01, Leases (Topic 842): Land Easement Practical Expedient for Transition to Topic 842. The amendments in this update provide an optional expedient to not evaluate existing or expired land easements that were not previously accounted for under current leases guidance in Topic 840. An entity that elects this practical expedient should evaluate new or modified land easements beginning at the date of adoption. The Company does not currently account for any land easements under Topic 840 and plans to utilize this practical expedient in conjunction with the adoption of ASU 2016-02.

In June 2016, the FASB issued ASU No. 2016-13, Financial Instruments-Credit Losses: Measurement of Credit Losses on Financial Instruments. This ASU amends guidance on reporting credit losses for assets held at amortized cost basis and available for sale debt securities. For assets held at amortized cost basis, this ASU eliminates the probable initial recognition threshold in current GAAP and instead, requires an entity to reflect its current estimate of all expected credit losses. The amendments affect loans, debt securities, trade receivables, net investments in leases, off balance sheet credit exposure, reinsurance receivables and any other financial assets not excluded from the scope that have the contractual right to receive cash. The guidance is effective for periods after December 15, 2019, with early adoption permitted. The Company is currently evaluating the impact this standard will have on its financial statements and related disclosures and does not anticipate it to have a material effect.

In August 2016, the FASB issued ASU No. 2016-15, Statement of Cash Flows: Classification of Certain Cash Receipts and Cash Payments. This ASU clarifies how certain cash receipts and cash payments should be classified and presented in the statement of cash flows. The Company adopted this standard in the first quarter of 2018 and has made an accounting policy election to classify distributions received from equity method investees using the nature of the distribution approach, which classifies distributions received from investees as either cash inflows from operating activities or cash inflows from investing activities in the statement of cash flows based on the nature of the activities of the investee that generated the distribution. The impact of adopting this ASU was not material to prior periods presented.

In November 2016, the FASB issued ASU No. 2016-18, Statement of Cash Flows (Topic 230): Restricted Cash. This ASU requires that amounts generally described as restricted cash and restricted cash equivalents be included with cash and cash equivalents when reconciling the beginning-of-period and end-of-period amounts shown on the statement of cash flows and to provide a reconciliation of the totals in the statement of cash flows to the related captions in the balance sheet when the cash, cash equivalents, restricted cash, and restricted cash equivalents are presented in more than one line item on the balance sheet. The Company adopted this standard in the first quarter of 2018 using the retrospective transition method. The adoption of this standard had no impact on the statement of cash flows for the nine months ended September 30, 2018 and resulted in the addition of $185.0 million of restricted cash to the beginning cash balance and an increase to net cash used in investing activities by the same amount on the statement of cash flows for the nine months ended September 30, 2017.

In January 2017, the FASB issued ASU No. 2017-01, Clarifying the Definition of a Business. Under the current business combination guidance, there are three elements of a business: inputs, processes and outputs. The revised guidance adds an initial screen test to determine if substantially all of the fair value of the gross assets acquired is concentrated in a single asset or group of similar assets. If that screen is met, the set of assets is not a business. The new framework also specifies the minimum required inputs and processes necessary to be a business. The Company adopted this standard in the first quarter of 2018 with no significant effect on its financial statements or related disclosures.

In February 2018, the FASB issued ASU No. 2018-02, Income statement - Reporting Comprehensive Income (Topic 220) - Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income, which allows a reclassification from accumulated other comprehensive income to retained earnings for standard tax effects resulting from the Tax Cuts and Jobs Act of 2017. The amendment will be effective for reporting periods beginning after December 15, 2018, and early adoption is permitted. The Company is currently assessing the impact of the ASU on its consolidated financial statements and related disclosures.

In August 2018, the FASB issued ASU No. 2018-13, Fair Value Measurement (Topic 820): Disclosure Framework—Changes to the Disclosure Requirements for Fair Value Measurementwhich removes, modifies, and adds certain disclosure requirements on fair value measurements. The amendment will be effective for reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is currently assessing the impact of the ASU on its consolidated financial statements and related disclosures.

In August 2018, the FASB also issued ASU No. 2018-15 , Intangibles—Goodwill and Other—Internal-Use Software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract, which aligns the accounting for costs associated with implementing a cloud computing arrangement in a hosting arrangement that is a service contract with the accounting for implementation costs incurred to develop or obtain internal-use software. The amendment will be effective for reporting periods beginning after December 15, 2019, and early adoption is permitted. The Company is currently assessing the impact of the ASU on its consolidated financial statements and related disclosures.

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ACQUISITIONS (Tables)

9 Months Ended

Sep. 30, 2018

Business Combinations [Abstract]

Schedule of recognized identified assets acquired and liabilities assumed

The following table summarizes the consideration paid by the Company in the Vitruvian Acquisition to acquire the properties and the fair value amount of the assets acquired as of February 17, 2017.

	(In thousands)
Consideration:
Cash, net of purchase price adjustments	$	1,354,093
Fair value of Gulfport’s common stock issued	464,639
Total consideration	$	1,818,732
Estimated fair value of identifiable assets acquired and liabilities assumed:
Oil and natural gas properties
Proved properties	$	362,264
Unproved properties	1,462,957
Asset retirement obligations	(6,489		)
Total fair value of net identifiable assets acquired	$	1,818,732

Schedule of pro forma information

The pro forma combined financial information has been included for comparative purposes and is not necessarily indicative of the results that might have actually occurred had the Vitruvian Acquisition taken place on January 1, 2017; furthermore, the financial information is not intended to be a projection of future results.

	Three months ended		Nine months ended
	September 30, 2017		September 30, 2017
	(In thousands, except share data)
Pro forma revenue	$	265,498	$	958,354
Pro forma net income	$	18,235	$	300,052
Pro forma earnings per share (basic)	$	0.10	$	1.68
Pro forma earnings per share (diluted)	$	0.10	$	1.68

For the three months ended September 30, 2017 and the period from the acquisition date of February 17, 2017 to September 30, 2017, the assets acquired in the Vitruvian Acquisition contributed the following amounts of revenue to the Company's consolidated statements of operations. The amount of net income contributed by the assets is not presented below as it is impracticable to calculate due to the Company integrating the acquired assets into its overall operations using the full cost method of accounting.

			Period from
			February 17, 2017
	Three months ended		to
	September 30, 2017		September 30, 2017
	(In thousands)
Revenue	$	60,940	$	137,706

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PROPERTY AND EQUIPMENT (Tables)

9 Months Ended

Sep. 30, 2018

Property, Plant and Equipment [Abstract]

Schedule of property and equipment

The major categories of property and equipment and related accumulated depletion, depreciation, amortization and impairment as of September 30, 2018 and December 31, 2017 are as follows:

	September 30, 2018			December 31, 2017
	(In thousands)
Oil and natural gas properties	$	9,936,714		$	9,169,156
Office furniture and fixtures	42,302			37,369
Building	44,565			44,565
Land	5,521			4,820
Total property and equipment	10,029,102			9,255,910
Accumulated depletion, depreciation, amortization and impairment	(4,506,306		)	(4,153,733		)
Property and equipment, net	$	5,522,796		$	5,102,177

Summary of non-producing properties excluded from amortization by area

The following table summarizes the Company’s non-producing properties excluded from amortization by area at September 30, 2018:

	September 30, 2018
	(In thousands)
Utica	$	1,522,633
MidContinent	1,401,392
Niobrara	449
Southern Louisiana	571
Bakken	100
	$	2,925,145

Schedule of asset retirement obligation

A reconciliation of the Company’s asset retirement obligation for the nine months ended September 30, 2018 and 2017 is as follows:

	September 30, 2018			September 30, 2017
	(In thousands)
Asset retirement obligation, beginning of period	$	75,100		$	34,276
Liabilities incurred	1,468			11,557
Liabilities settled	(719		)	(2,520		)
Accretion expense	3,056			1,148
Revisions in estimated cash flows	(374		)	—
Asset retirement obligation as of end of period	78,531			44,461
Less current portion	120			195
Asset retirement obligation, long-term	$	78,411		$	44,266

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EQUITY INVESMENTS (Tables)

9 Months Ended

Sep. 30, 2018

Equity Method Investments and Joint Ventures [Abstract]

Schedule of equity method investments

Investments accounted for by the equity method consist of the following as of September 30, 2018 and December 31, 2017:

			Carrying value				(Income) loss from equity method investments
	Approximate ownership %		September 30, 2018		December 31, 2017		Three months ended September 30,						Nine months ended September 30,
							2018			2017			2018			2017
			(In thousands)
Investment in Tatex Thailand II, LLC	23.5	%	$	—	$	—	$	(137	)	$	(95	)	$	(241	)	$	(549	)
Investment in Grizzly Oil Sands ULC	24.9999	%	53,381		57,641		275			296			833			869
Investment in Timber Wolf Terminals LLC	50.0	%	—		983		—			4			536			8
Investment in Windsor Midstream LLC	22.5	%	39		30		—			(2		)	(9		)	25,232
Investment in Stingray Cementing LLC(1)	—	%	—		—		—			—			—			205
Investment in Stingray Energy Services LLC(1)	—	%	—		—		—			—			—			282
Investment in Sturgeon Acquisitions LLC(1)	—	%	—		—		—			—			—			(71		)
Investment in Mammoth Energy Services, Inc.(1)	22.0	%	179,109		165,715		(12,996		)	2,407			(35,708		)	4,907
Investment in Strike Force Midstream LLC(2)	—	%	—		77,743		—			127			(693		)	2,585
			$	232,529	$	302,112	$	(12,858	)	$	2,737		$	(35,282	)	$	33,468

(1)	On June 5, 2017, Mammoth Energy Services, Inc. ("Mammoth Energy") acquired Stingray Cementing LLC, Stingray Energy Services LLC and Sturgeon Acquisitions LLC. See below under Mammoth Energy Partners LP/Mammoth Energy Services, Inc. for information regarding these transactions.
(2)	On May 1, 2018, the Company sold its 25% interest in Strike Force Midstream to EQT Midstream Partners, LP. See below under under Strike Force Midstream LLC for information regarding this transaction.

Summary of equity investments - balance sheet

The tables below summarize financial information for the Company’s equity investments as of September 30, 2018 and December 31, 2017.

Summarized balance sheet information:

	September 30, 2018		December 31, 2017
	(In thousands)
Current assets	$	481,394	$	415,032
Noncurrent assets	$	1,336,604	$	1,542,090
Current liabilities	$	358,177	$	261,086
Noncurrent liabilities	$	48,328	$	148,839

Summary of equity investments - income statement

Summarized results of operations:    

	Three months ended September 30,				Nine months ended September 30,
	2018		2017		2018		2017
	(In thousands)
Gross revenue	$	384,043	$	160,950	$	1,451,580	$	357,901
Net income (loss)	$	68,414	$	2,101	$	181,884	$	(109,651	)

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LONG-TERM DEBT (Tables)

9 Months Ended

Sep. 30, 2018

Long-term Debt, Unclassified [Abstract]

Summary of long-term debt

Long-term debt consisted of the following items as of September 30, 2018 and December 31, 2017:

	September 30, 2018			December 31, 2017
	(In thousands)
Revolving credit agreement (1)	$	60,000		$	—
6.625% senior unsecured notes due 2023 (2)	350,000			350,000
6.000% senior unsecured notes due 2024 (3)	650,000			650,000
6.375% senior unsecured notes due 2025 (4)	600,000			600,000
6.375% senior unsecured notes due 2026 (5)	450,000			450,000
Net unamortized debt issuance costs (6)	(31,824		)	(34,781		)
Construction loan (7)	23,296			23,724
Less: current maturities of long term debt	(647		)	(622		)
Debt reflected as long term	$	2,100,825		$	2,038,321

The Company capitalized approximately $1.6 million and $4.0 million in interest expense to undeveloped oil and natural gas properties during the three and nine months ended September 30, 2018, respectively. The Company capitalized approximately $2.1 million and $8.8 million in interest expense to undeveloped oil and natural gas properties during the three and nine months ended September 30, 2017, respectively.

(1) The Company has entered into a senior secured revolving credit facility, as amended, with The Bank of Nova Scotia, as the lead arranger and administrative agent and certain lenders from time to time party thereto. The credit agreement provides for a maximum facility amount of $1.5 billion and matures on December 31, 2021. On March 29, 2017, the Company further amended its revolving credit facility to, among other things, amend the definition of the term EBITDAX to permit pro forma treatment of acquisitions that involve the payment of consideration by Gulfport and its subsidiaries in excess of $50.0 million and of dispositions of property or series of related dispositions of properties that yields gross proceeds to Gulfport or any of its subsidiaries in excess of $50.0 million. On May 4, 2017, the revolving credit facility was further amended to increase the borrowing base from $700.0 million to $1.0 billion, adjust certain of the Company’s investment baskets and add five additional banks to the syndicate. On November 21, 2017, the Company further amended its revolving credit facility to, among other things, (a) decrease the applicable rate for all loans by 0.5% and (b) add a provision that allows Gulfport to elect a commitment amount (the “Elected Commitment Amount”) that is less than the borrowing base. In connection with this amendment, the borrowing base was set at $1.2 billion, with an elected commitment of $1.0 billion. On May 21, 2018, the Company further amended its revolving credit facility to, among other things, (a) decrease the applicable rate for all loans by 0.25%, (b) permit Gulfport and each of its subsidiaries to use the proceeds from dispositions of certain investments to acquire the common stock or other equity interests of Gulfport, subject to certain limitations and (c) increase the borrowing base to $1.4 billion, with an elected commitment of $1.0 billion.

As of September 30, 2018, $60.0 million was outstanding under the revolving credit facility and the total availability for future borrowings under this facility, after giving effect to an aggregate of $316.2 million of letters of credit, was $623.8 million. The Company’s wholly-owned subsidiaries have guaranteed the obligations of the Company under the revolving credit facility.

Advances under the revolving credit facility may be in the form of either base rate loans or eurodollar loans. The interest rate for base rate loans is equal to (1) the applicable rate, which ranges from 0.25% to 1.25%, plus (2) the highest of: (a) the federal funds rate plus 0.50%, (b) the rate of interest in effect for such day as publicly announced from time to time by agent as its “prime rate,” and (c) the eurodollar rate for an interest period of one month plus 1.00%. The interest rate for eurodollar loans is equal to (1) the applicable rate, which ranges from 1.25% to 2.25%, plus (2) the London interbank offered rate that appears on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate for deposits in U.S. dollars, or, if such rate is not available, the rate as administered by ICE Benchmark Administration (or any other person that takes over administration of such rate) per annum equal to the offered rate on such other page or service that displays on average London interbank offered rate as determined by ICE Benchmark Administration (or any other person that takes over administration of such rate) for deposits in U.S. dollars, or, if such rate is not available, the average quotations for three major New York money center banks of whom the agent shall inquire as the “London Interbank Offered Rate” for deposits in U.S. dollars. At September 30, 2018, amounts borrowed under the credit facility bore interest at the eurodollar rate with a weighted average of 3.72%.

The revolving credit facility contains customary negative covenants including, but not limited to, restrictions on the Company’s and its subsidiaries’ ability to:

•incur indebtedness;

•grant liens;

•pay dividends and make other restricted payments;

•make investments;

•make fundamental changes;

•enter into swap contracts;

•dispose of assets;

•change the nature of their business; and

•enter into transactions with affiliates.

The negative covenants are subject to certain exceptions as specified in the revolving credit facility. The revolving credit facility also contains certain affirmative covenants, including, but not limited to the following financial covenants:

(i) the ratio of net funded debt to EBITDAX (net income, excluding (i) any non-cash revenue or expense associated with swap contracts resulting from ASC 815 and (ii) any cash or non-cash revenue or expense attributable to minority investments plus without duplication and, in the case of expenses, to the extent deducted from revenues in determining net income, the sum of (a) the aggregate amount of consolidated interest expense for such period, (b) the aggregate amount of income, franchise, capital or similar tax expense (other than ad valorem taxes) for such period, (c) all amounts attributable to depletion, depreciation, amortization and asset or goodwill impairment or writedown for such period, (d) all other non-cash charges, (e) exploration costs deducted in determining net income under successful efforts accounting, (f) actual cash distributions received from minority investments, (g) to the extent actually reimbursed by insurance, expenses with respect to liability on casualty events or business interruption, and (h) all reasonable transaction expenses related to dispositions and acquisitions of assets, investments and debt and equity offerings (provided that expenses related to any unsuccessful disposition will be limited to $3.0 million in the aggregate) for a twelve-month period may not be greater than 4.00 to 1.00; and

(ii) the ratio of EBITDAX to interest expense for a twelve-month period may not be less than 3.00 to 1.00.

The Company was in compliance with its financial covenants at September 30, 2018.

(2) On April 21, 2015, the Company issued $350.0 million in aggregate principal amount of 6.625% Senior Notes due 2023 (the “2023 Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act (the “2023 Notes Offering”). The Company received net proceeds of approximately $343.6 million after initial purchaser discounts and commissions and estimated offering expenses.

The 2023 Notes were issued under an indenture, dated as of April 21, 2015, among the Company, the subsidiary guarantors party thereto and Wells Fargo Bank, National Association, as trustee. In October 2015, the 2023 Notes were exchanged for a new issue of substantially identical debt securities registered under the Securities Act. Pursuant to the indenture relating to the 2023 Notes, interest on the 2023 Notes accrues at a rate of 6.625% per annum on the outstanding principal amount thereof, payable semi-annually on May 1 and November 1 of each year. The 2023 Notes are not guaranteed by Grizzly Holdings, Inc. and will not be guaranteed by any of the Company’s future unrestricted subsidiaries.

(3) On October 14, 2016, the Company issued $650.0 million in aggregate principal amount of 6.000% Senior Notes due 2014 (the "2024 Notes"). The 2024 Notes were issued under an indenture, dated as of October 14, 2016, among the Company, the subsidiary guarantors party thereto and the senior note indenture trustee (the “2024 Indenture”), to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act (the “2024 Notes Offering”). Under the 2024 Indenture, interest on the 2024 Notes accrues at a rate of 6.000% per annum on the outstanding principal amount thereof from October 14, 2016, payable semi-annually on April 15 and October 15 of each year, commencing on April 15, 2017. The 2024 Notes will mature on October 15, 2024. The Company received approximately $638.9 million in net proceeds from the offering of the 2024 Notes, which was used, together with cash on hand, to purchase the then outstanding 2020 Notes in a concurrent cash tender offer, to pay fees and expenses thereof, and to redeem any of the 2020 Notes that remained outstanding after the completion of the tender offer.

(4) On December 21, 2016, the Company issued $600.0 million in aggregate principal amount of 6.375% Senior Notes due 2025 (the “2025 Notes”). The 2025 Notes were issued under an indenture, dated as of December 21, 2016, among the Company, the subsidiary guarantors party thereto and the senior note indenture trustee (the “2025 Indenture”), to qualified institutional buyers pursuant to Rule 144A under the Securities Act of 1933, and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. Under the 2025 Indenture, interest on the 2025 Notes accrues at a rate of 6.375% per annum on the outstanding principal amount thereof from December 21, 2016, payable semi-annually on May 15 and November 15 of each year, commencing on May 15, 2017. The 2025 Notes will mature on May 15, 2025. The Company received approximately $584.7 million in net proceeds from the offering of the 2025 Notes, which was used, together with the net proceeds from the Company’s December 2016 common stock offering and cash on hand, to fund the cash portion of the purchase price for the Vitruvian Acquisition. See “Note 1 – Acquisitions” for additional discussion of the Vitruvian Acquisition.

(5) On October 11, 2017, the Company issued $450.0 million in aggregate principal amount of its 6.375% Senior Notes due 2026 (the “2026 Notes”) to qualified institutional buyers pursuant to Rule 144A under the Securities Act and to certain non-U.S. persons in accordance with Regulation S under the Securities Act. Interest on the 2026 Notes accrues at a rate of 6.375% per annum on the outstanding principal amount thereof from October 11, 2017, payable semi-annually on January 15 and July 15 of each year, commencing on January 15, 2018. The 2026 Notes will mature on January 15, 2026. The Company received approximately $444.1 million in net proceeds from the offering of the 2026 Notes, a portion of which was used to repay all of the Company's outstanding borrowings under its secured revolving credit facility on October 11, 2017 and the balance was used to fund the remaining outspend related to the Company's 2017 capital development plans.

In connection with the 2026 Notes offering, the Company and its subsidiary guarantors entered into a registration rights agreement pursuant to which the Company agreed to file a registration statement with respect to an offer to exchange the 2026 Notes for a new issue of substantially identical debt securities registered under the Securities Act. On January 18, 2018, the Company filed a registration statement on Form S-4 with respect to an offer to exchange the 2026 Notes for substantially identical debt securities registered under the Securities Act, which registration statement was declared effective by the SEC on February 12, 2018. The exchange offer relating to the 2026 notes closed on March 22, 2018.

(6) Loan issuance costs related to the 2023 Notes, the 2024 Notes, the 2025 Notes and the 2026 Notes (collectively the “Notes”) have been presented as a reduction to the Notes. At September 30, 2018, total unamortized debt issuance costs were $4.6 million for the 2023 Notes, $9.0 million for the 2024 Notes, $12.9 million for the 2025 Notes and $5.2 million for the 2026 Notes. In addition, loan commitment fee costs for the construction loan agreement described immediately below were $0.1 million at September 30, 2018.

(7) On June 4, 2015, the Company entered into a construction loan agreement (the “Construction Loan”) with InterBank for the construction of a new corporate headquarters in Oklahoma City, which was substantially completed in December 2016. The Construction Loan allows for maximum principal borrowings of $24.5 million and required the Company to fund 30% of the cost of the construction before any funds could be drawn, which occurred in January 2016. Interest accrues daily on the outstanding principal balance at a fixed rate of 4.50% per annum and was payable on the last day of the month through May 31, 2017. Starting June 30, 2017, the Company began making monthly payments of principal and interest, with the final payment due June 4, 2025. At September 30, 2018, the total borrowings under the Construction Loan were approximately $23.3 million.

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STOCK-BASED COMPENSATION (Tables)

9 Months Ended

Sep. 30, 2018

Share-based Compensation [Abstract]

Schedule of restricted stock activity

The following table summarizes restricted stock activity for the nine months ended September 30, 2018:

	Number of Unvested Restricted Shares		Weighted Average Grant Date Fair Value
Unvested shares as of January 1, 2018	976,027		$	18.71
Granted	1,197,628		9.45
Vested	(618,202	)	17.77
Forfeited	(32,633	)	17.31
Unvested shares as of September 30, 2018	1,522,820		$	11.84

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EARNINGS PER SHARE (Tables)

9 Months Ended

Sep. 30, 2018

Earnings Per Share [Abstract]

Schedule of earnings per share

Reconciliations of the components of basic and diluted net income per common share are presented in the tables below:

	Three months ended September 30,
	2018					2017
	Income		Shares	Per Share		Income		Shares	Per Share
	(In thousands, except share data)
Basic:
Net income	$	95,150	173,057,538	$	0.55	$	18,235	182,957,416	$	0.10
Effect of dilutive securities:
Stock options and awards	—		247,376			—		51,020
Diluted:
Net income	$	95,150	173,304,914	$	0.55	$	18,235	183,008,436	$	0.10

	Nine months ended September 30,
	2018					2017
	Income		Shares	Per Share		Income		Shares	Per Share
	(In thousands, except share data)
Basic:
Net income	$	296,559	175,776,312	$	1.69	$	278,626	178,736,569	$	1.56
Effect of dilutive securities:
Stock options and awards	—		664,149			—		394,001
Diluted:
Net income	$	296,559	176,440,461	$	1.68	$	278,626	179,130,570	$	1.56

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COMMITTMENTS AND CONTINGENCIES (Tables)

9 Months Ended

Sep. 30, 2018

Long-term Purchase Commitment [Line Items]

Schedule of future minimum lease commitments

Future minimum lease commitments under these leases at September 30, 2018 were as follows:

	(In thousands)
Remaining 2018	$	39
2019	144
2020	90
2021	38
Total	$	311

Schedule of firm transportation commitments

The table below presents these commitments at September 30, 2018 as follows:

	(MMBtu per day)
Remaining 2018	590,000
2019	659,000
2020	526,000
2021	372,000
2022	272,000
Thereafter	240,000
Total	2,659,000

Transportation commitment

Long-term Purchase Commitment [Line Items]

Schedule of other commitments

The table below presents these commitments at September 30, 2018 as follows:

	(In thousands)
Remaining 2018	$	62,012
2019	251,644
2020	247,581
2021	246,620
2022	246,620
Thereafter	2,511,853
Total	$	3,566,330

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DERIVATIVE INSTRUMENTS (Tables)

9 Months Ended

Sep. 30, 2018

General Discussion of Derivative Instruments and Hedging Activities [Abstract]

Schedule of open fixed price swap positions and natural gas basis swap positions

As of September 30, 2018, the Company had the following natural gas basis swap positions for Transco Zone 4.

	Location	Daily Volume (MMBtu/day)	Weighted Average Price
Remaining 2018	Transco Zone 4	40,000	$	(0.05	)
2019	Transco Zone 4	60,000	$	(0.05	)
2020	Transco Zone 4	60,000	$	(0.05	)

Below is a summary of the Company’s open fixed price swap positions as of September 30, 2018.

	Location	Daily Volume (MMBtu/day)	Weighted Average Price
Remaining 2018	NYMEX Henry Hub	1,010,000	$	3.01
2019	NYMEX Henry Hub	1,154,000	$	2.81
2020	NYMEX Henry Hub	204,000	$	2.77

	Location	Daily Volume (Bbls/day)	Weighted Average Price
Remaining 2018	ARGUS LLS	2,000	$	56.22
2019	ARGUS LLS	1,000	$	59.55
Remaining 2018	NYMEX WTI	4,500	$	53.72
2019	NYMEX WTI	4,000	$	58.28

	Location	Daily Volume (Bbls/day)	Weighted Average Price
2019	Mont Belvieu C2	1,000	$	18.48
Remaining 2018	Mont Belvieu C3	4,000	$	29.34
2019	Mont Belvieu C3	4,000	$	28.87
Remaining 2018	Mont Belvieu C5	500	$	46.62
2019	Mont Belvieu C5	500	$	54.08

The Company sold call options and used the associated premiums to enhance the fixed price for a portion of the fixed price natural gas swaps listed above. Each short call option has an established ceiling price. When the referenced settlement price is above the price ceiling established by these short call options, the Company pays its counterparty an amount equal to the difference between the referenced settlement price and the price ceiling multiplied by the hedged contract volumes.

	Location	Daily Volume (MMBtu/day)	Weighted Average Price
October 2018 - March 2019	NYMEX Henry Hub	50,000	$	3.13
April 2019 - December 2019	NYMEX Henry Hub	30,000	$	3.10

Schedule of derivative instruments in balance sheet

The following table presents the fair value of the Company’s derivative instruments on a gross basis at September 30, 2018 and December 31, 2017:

	September 30, 2018		December 31, 2017
	(In thousands)
Short-term derivative instruments - asset	$	19,809	$	78,847
Long-term derivative instruments - asset	$	3,530	$	8,685
Short-term derivative instruments - liability	$	62,601	$	32,534
Long-term derivative instruments - liability	$	15,101	$	2,989

Schedule of net gain (loss) on derivatives

The following table presents the gain and loss recognized in net (loss) gain on natural gas, oil and NGL derivatives in the accompanying consolidated statements of operations for the three and nine months ended September 30, 2018 and 2017.

	Net (loss) gain on derivative instruments
	Three months ended September 30,						Nine months ended September 30,
	2018			2017			2018			2017
	(In thousands)
Natural gas derivatives	$	14,101		$	(7,077	)	$	(26,789	)	$	135,868
Oil derivatives	(11,610		)	(6,571		)	(45,176		)	12,477
Natural gas liquids derivatives	(12,154		)	(9,212		)	(24,772		)	(6,757		)
Total	$	(9,663	)	$	(22,860	)	$	(96,737	)	$	141,588

Recognized derivative assets

The following table presents the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value.

	As of September 30, 2018
	Gross Assets (Liabilities)			Gross Amounts
	Presented in the			Subject to Master			Net
	Consolidated Balance Sheets			Netting Agreements			Amount
	(In thousands)
Derivative assets	$	23,339		$	(17,053	)	$	6,286
Derivative liabilities	$	(77,702	)	$	17,053		$	(60,649	)

	As of December 31, 2017
	Gross Assets (Liabilities)			Gross Amounts
	Presented in the			Subject to Master			Net
	Consolidated Balance Sheets			Netting Agreements			Amount
	(In thousands)
Derivative assets	$	87,532		$	(22,199	)	$	65,333
Derivative liabilities	$	(35,523	)	$	22,199		$	(13,324	)

Recognized derivative liabilities

The following table presents the gross amounts of recognized derivative assets and liabilities in the consolidated balance sheets and the amounts that are subject to offsetting under master netting arrangements with counterparties, all at fair value.

	As of September 30, 2018
	Gross Assets (Liabilities)			Gross Amounts
	Presented in the			Subject to Master			Net
	Consolidated Balance Sheets			Netting Agreements			Amount
	(In thousands)
Derivative assets	$	23,339		$	(17,053	)	$	6,286
Derivative liabilities	$	(77,702	)	$	17,053		$	(60,649	)

	As of December 31, 2017
	Gross Assets (Liabilities)			Gross Amounts
	Presented in the			Subject to Master			Net
	Consolidated Balance Sheets			Netting Agreements			Amount
	(In thousands)
Derivative assets	$	87,532		$	(22,199	)	$	65,333
Derivative liabilities	$	(35,523	)	$	22,199		$	(13,324	)

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FAIR VALUE MEASUREMENTS (Tables)

9 Months Ended

Sep. 30, 2018

Fair Value Disclosures [Abstract]

Summary of financial and non-financial assets and liabilities by valuation level

The following tables summarize the Company’s financial and non-financial assets and liabilities by ASC 820 valuation level as of September 30, 2018 and December 31, 2017:

	September 30, 2018
	Level 1		Level 2		Level 3
	(In thousands)
Assets:
Derivative Instruments	$	—	$	23,339	$	—
Liabilities:
Derivative Instruments	$	—	$	77,702	$	—

	December 31, 2017
	Level 1		Level 2		Level 3
	(In thousands)
Assets:
Derivative Instruments	$	—	$	87,532	$	—
Liabilities:
Derivative Instruments	$	—	$	35,523	$	—

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CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Tables)

9 Months Ended

Sep. 30, 2018

Condensed Financial Information Disclosure [Abstract]

CONDENSED CONSOLIDATING BALANCE SHEETS

CONDENSED CONSOLIDATING BALANCE SHEETS

(Amounts in thousands)

	September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	89,214		$	35,357		$	—		$	—		$	124,571
Accounts receivable - oil and natural gas sales	111,463			45,928			—			—			157,391
Accounts receivable - joint interest and other	19,066			20,445			—			—			39,511
Accounts receivable - related parties	79			—			—			—			79
Accounts receivable - intercompany	662,319			240,373			—			(902,692		)	—
Prepaid expenses and other current assets	7,521			2,221			—			—			9,742
Short-term derivative instruments	19,809			—			—			—			19,809
Total current assets	909,471			344,324			—			(902,692		)	351,103
Property and equipment:
Oil and natural gas properties, full-cost accounting	7,003,396			2,934,047			—			(729		)	9,936,714
Other property and equipment	91,637			751			—			—			92,388
Accumulated depletion, depreciation, amortization and impairment	(4,506,267		)	(39		)	—			—			(4,506,306		)
Property and equipment, net	2,588,766			2,934,759			—			(729		)	5,522,796
Other assets:
Equity investments and investments in subsidiaries	2,723,140			—			53,380			(2,543,991		)	232,529
Long-term derivative instruments	3,530			—			—			—			3,530
Inventories	6,800			1,434			—			—			8,234
Other assets	13,018			4,020			—			—			17,038
Total other assets	2,746,488			5,454			53,380			(2,543,991		)	261,331
Total assets	$	6,244,725		$	3,284,537		$	53,380		$	(3,447,412	)	$	6,135,230
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	464,426		$	118,038		$	—		$	—		$	582,464
Accounts payable - intercompany	240,310			662,254			128			(902,692		)	—
Asset retirement obligation - current	120			—			—			—			120
Short-term derivative instruments	62,601			—			—			—			62,601
Current maturities of long-term debt	647			—			—			—			647
Total current liabilities	768,104			780,292			128			(902,692		)	645,832
Long-term derivative instruments	15,101			—			—			—			15,101
Asset retirement obligation - long-term	65,634			12,777			—			—			78,411
Deferred tax liability	3,046			—			—			—			3,046
Long-term debt, net of current maturities	2,100,825			—			—			—			2,100,825
Total liabilities	2,952,710			793,069			128			(902,692		)	2,843,215
Stockholders’ equity:
Common stock	1,732			—			—			—			1,732
Paid-in capital	4,316,006			1,915,598			261,626			(2,177,224		)	4,316,006
Accumulated other comprehensive (loss) income	(46,354		)	—			(44,338		)	44,338			(46,354		)
Retained (deficit) earnings	(979,369		)	575,870			(164,036		)	(411,834		)	(979,369		)
Total stockholders’ equity	3,292,015			2,491,468			53,252			(2,544,720		)	3,292,015
Total liabilities and stockholders’ equity	$	6,244,725		$	3,284,537		$	53,380		$	(3,447,412	)	$	6,135,230

CONDENSED CONSOLIDATING BALANCE SHEETS

(Amounts in thousands)

	December 31, 2017
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Assets
Current assets:
Cash and cash equivalents	$	67,908		$	31,649		$	—		$	—		$	99,557
Accounts receivable - oil and natural gas sales	112,686			34,087			—			—			146,773
Accounts receivable - joint interest and other	15,435			20,005			—			—			35,440
Accounts receivable - intercompany	554,439			63,374			—			(617,813		)	—
Prepaid expenses and other current assets	4,719			193			—			—			4,912
Short-term derivative instruments	78,847			—			—			—			78,847
Total current assets	834,034			149,308			—			(617,813		)	365,529
Property and equipment:
Oil and natural gas properties, full-cost accounting,	6,562,147			2,607,738			—			(729		)	9,169,156
Other property and equipment	86,711			43			—			—			86,754
Accumulated depletion, depreciation, amortization and impairment	(4,153,696		)	(37		)	—			—			(4,153,733		)
Property and equipment, net	2,495,162			2,607,744			—			(729		)	5,102,177
Other assets:
Equity investments and investments in subsidiaries	2,361,575			77,744			57,641			(2,194,848		)	302,112
Long-term derivative instruments	8,685			—			—			—			8,685
Deferred tax asset	1,208			—			—			—			1,208
Inventories	5,816			2,411			—			—			8,227
Other assets	12,483			7,331			—			—			19,814
Total other assets	2,389,767			87,486			57,641			(2,194,848		)	340,046
Total assets	$	5,718,963		$	2,844,538		$	57,641		$	(2,813,390	)	$	5,807,752
Liabilities and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities	$	416,249		$	137,361		$	—		$	(1	)	$	553,609
Accounts payable - intercompany	63,373			554,313			127			(617,813		)	—
Asset retirement obligation - current	120			—			—			—			120
Short-term derivative instruments	32,534			—			—			—			32,534
Current maturities of long-term debt	622			—			—			—			622
Total current liabilities	512,898			691,674			127			(617,814		)	586,885
Long-term derivative instruments	2,989			—			—			—			2,989
Asset retirement obligation - long-term	63,141			11,839			—			—			74,980
Other non-current liabilities	—			2,963			—			—			2,963
Long-term debt, net of current maturities	2,038,321			—			—			—			2,038,321
Total liabilities	2,617,349			706,476			127			(617,814		)	2,706,138
Stockholders’ equity:
Common stock	1,831			—			—			—			1,831
Paid-in capital	4,416,250			1,915,598			259,307			(2,174,905		)	4,416,250
Accumulated other comprehensive (loss) income	(40,539		)	—			(38,593		)	38,593			(40,539		)
Retained (deficit) earnings	(1,275,928		)	222,464			(163,200		)	(59,264		)	(1,275,928		)
Total stockholders’ equity	3,101,614			2,138,062			57,514			(2,195,576		)	3,101,614
Total liabilities and stockholders’ equity	$	5,718,963		$	2,844,538		$	57,641		$	(2,813,390	)	$	5,807,752

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Three months ended September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	235,683		$	125,279		$	—		$	—		$	360,962
Costs and expenses:
Lease operating expenses	16,502			5,823			—			—			22,325
Production taxes	4,505			4,843			—			—			9,348
Midstream gathering and processing	54,397			24,516			—			—			78,913
Depreciation, depletion and amortization	119,914			1			—			—			119,915
General and administrative	16,314			(467		)	1			—			15,848
Accretion expense	812			225			—			—			1,037
	212,444			34,941			1			—			247,386
INCOME (LOSS) FROM OPERATIONS	23,239			90,338			(1		)	—			113,576
OTHER (INCOME) EXPENSE:
Interest expense	34,254			(1,001		)	—			—			33,253
Interest income	(86		)	(6		)	—			—			(92		)
Litigation settlement	917			—			—			—			917
Gain on sale of equity method investments	(2,733		)	—			—			—			(2,733		)
(Income) loss from equity method investments and investments in subsidiaries	(104,226		)	(1		)	275			91,094			(12,858		)
Other income	(37		)	(24		)	—			—			(61		)
	(71,911		)	(1,032		)	275			91,094			18,426
INCOME (LOSS) BEFORE INCOME TAXES	95,150			91,370			(276		)	(91,094		)	95,150
INCOME TAX BENEFIT	—			—			—			—			—
NET INCOME (LOSS)	$	95,150		$	91,370		$	(276	)	$	(91,094	)	$	95,150

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Three months ended September 30, 2017
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	188,390		$	77,108		$	—		$	—		$	265,498
Costs and expenses:
Lease operating expenses	16,019			4,001			—			—			20,020
Production taxes	4,052			1,367			—			—			5,419
Midstream gathering and processing	52,725			16,647			—			—			69,372
Depreciation, depletion and amortization	106,649			1			—			—			106,650
General and administrative	13,956			(892		)	1			—			13,065
Accretion expense	335			121			—			—			456
Acquisition expense	(5		)	38			—			—			33
	193,731			21,283			1			—			215,015
(LOSS) INCOME FROM OPERATIONS	(5,341		)	55,825			(1		)	—			50,483
OTHER (INCOME) EXPENSE:
Interest expense	27,914			(784		)	—			—			27,130
Interest income	(29		)	(8		)	—			—			(37		)
(Income) loss from equity method investments and investments in subsidiaries	(53,880		)	128			296			56,193			2,737
Other income	(344		)	(1		)	—			—			(345		)
	(26,339		)	(665		)	296			56,193			29,485
INCOME (LOSS) BEFORE INCOME TAXES	20,998			56,490			(297		)	(56,193		)	20,998
INCOME TAX EXPENSE	2,763			—			—			—			2,763
NET INCOME (LOSS)	$	18,235		$	56,490		$	(297	)	$	(56,193	)	$	18,235

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Nine months ended September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	596,018		$	343,076		$	—		$	—		$	939,094
Costs and expenses:
Lease operating expenses	46,926			17,217			—			—			64,143
Production taxes	13,309			10,552			—			—			23,861
Midstream gathering and processing	152,605			61,941			—			—			214,546
Depreciation, depletion, and amortization	352,846			2			—			—			352,848
General and administrative	45,100			(2,148		)	3			—			42,955
Accretion expense	2,397			659			—			—			3,056
	613,183			88,223			3			—			701,409
(LOSS) INCOME FROM OPERATIONS	(17,165		)	254,853			(3		)	—			237,685
OTHER (INCOME) EXPENSE:
Interest expense	103,310			(2,388		)	—			—			100,922
Interest income	(144		)	(18		)	—			—			(162		)
Litigation settlement	917			—			—			—			917
Insurance proceeds	(231		)	—			—			—			(231		)
Gain on sale of equity method investments	(28,349		)	(96,419		)	—			—			(124,768		)
(Income) loss from equity method investments and investments in subsidiaries	(387,991		)	(694		)	833			352,570			(35,282		)
Other (income) expense	(1,167		)	(34		)	—			1,000			(201		)
	(313,655		)	(99,553		)	833			353,570			(58,805		)
INCOME (LOSS) BEFORE INCOME TAXES	296,490			354,406			(836		)	(353,570		)	296,490
INCOME TAX BENEFIT	(69		)	—			—			—			(69		)
NET INCOME (LOSS)	$	296,559		$	354,406		$	(836	)	$	(353,570	)	$	296,559

CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS

(Amounts in thousands)

	Nine months ended September 30, 2017
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Total revenues	$	710,184		$	212,271		$	—		$	—		$	922,455
Costs and expenses:
Lease operating expenses	49,891			10,153			—			—			60,044
Production taxes	10,799			3,665			—			—			14,464
Midstream gathering and processing	132,740			43,518			—			—			176,258
Depreciation, depletion, and amortization	254,884			3			—			—			254,887
General and administrative	39,882			(1,963		)	3			—			37,922
Accretion expense	908			240			—			—			1,148
Acquisition expense	—			2,391			—			—			2,391
	489,104			58,007			3			—			547,114
INCOME (LOSS) FROM OPERATIONS	221,080			154,264			(3		)	—			375,341
OTHER (INCOME) EXPENSE:
Interest expense	79,095			(4,298		)	—			—			74,797
Interest income	(913		)	(14		)	—			—			(927		)
Gain on sale of equity method investments	(12,523		)	—			—			—			(12,523		)
(Income) loss from equity method investments and investments in subsidiaries	(124,446		)	2,586			869			154,459			33,468
Other (income) expense	(1,522		)	(241		)	—			900			(863		)
	(60,309		)	(1,967		)	869			155,359			93,952
INCOME (LOSS) BEFORE INCOME TAXES	281,389			156,231			(872		)	(155,359		)	281,389
INCOME TAX EXPENSE	2,763			—			—			—			2,763
NET INCOME (LOSS)	$	278,626		$	156,231		$	(872	)	$	(155,359	)	$	278,626

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

CONDENSED CONSOLIDATING STATEMENTS OF COMPREHENSIVE INCOME (LOSS)

(Amounts in thousands)

	Three months ended September 30, 2018
	Parent		Guarantors		Non-Guarantor			Eliminations			Consolidated
Net income (loss)	$	95,150	$	91,370	$	(276	)	$	(91,094	)	$	95,150
Foreign currency translation adjustment	3,052		103		2,949			(3,052		)	3,052
Other comprehensive income (loss)	3,052		103		2,949			(3,052		)	3,052
Comprehensive income (loss)	$	98,202	$	91,473	$	2,673		$	(94,146	)	$	98,202

	Three months ended September 30, 2017
	Parent		Guarantors		Non-Guarantor			Eliminations			Consolidated
Net income (loss)	$	18,235	$	56,490	$	(297	)	$	(56,193	)	$	18,235
Foreign currency translation adjustment	6,832		158		6,674			(6,832		)	6,832
Other comprehensive income (loss)	6,832		158		6,674			(6,832		)	6,832
Comprehensive income (loss)	$	25,067	$	56,648	$	6,377		$	(63,025	)	$	25,067

	Nine months ended September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Net income (loss)	$	296,559		$	354,406		$	(836	)	$	(353,570	)	$	296,559
Foreign currency translation adjustment	(5,815		)	(70		)	(5,745		)	5,815			(5,815		)
Other comprehensive (loss) income	(5,815		)	(70		)	(5,745		)	5,815			(5,815		)
Comprehensive income (loss)	$	290,744		$	354,336		$	(6,581	)	$	(347,755	)	$	290,744

	Nine months ended September 30, 2017
	Parent		Guarantors		Non-Guarantor			Eliminations			Consolidated
Net income (loss)	$	278,626	$	156,231	$	(872	)	$	(155,359	)	$	278,626
Foreign currency translation adjustment	12,719		232		12,487			(12,719		)	12,719
Other comprehensive income (loss)	12,719		232		12,487			(12,719		)	12,719
Comprehensive income (loss)	$	291,345	$	156,463	$	11,615		$	(168,078	)	$	291,345

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

CONDENSED CONSOLIDATING STATEMENTS OF CASH FLOWS

(Amounts in thousands)

	Nine months ended September 30, 2018
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	416,833		$	192,123		$	(1	)	$	1		$	608,956
Net cash (used in) provided by investing activities	(344,330		)	(188,415		)	(2,318		)	2,318			(532,745		)
Net cash (used in) provided by financing activities	(51,197		)	—			2,319			(2,319		)	(51,197		)
Net increase in cash, cash equivalents and restricted cash	21,306			3,708			—			—			25,014
Cash, cash equivalents and restricted cash at beginning of period	67,908			31,649			—			—			99,557
Cash, cash equivalents and restricted cash at end of period	$	89,214		$	35,357		$	—		$	—		$	124,571

	Nine months ended September 30, 2017
	Parent			Guarantors			Non-Guarantor			Eliminations			Consolidated
Net cash provided by (used in) operating activities	$	310,624		$	181,108		$	(1	)	$	2		$	491,733
Net cash (used in) provided by investing activities	(2,034,554		)	(1,554,063		)	(1,843		)	1,408,980			(2,181,480		)
Net cash provided by (used in) financing activities	354,143			1,407,137			1,845			(1,408,982		)	354,143
Net (decrease) increase in cash, cash equivalents and restricted cash	(1,369,787		)	34,182			1			—			(1,335,604		)
Cash, cash equivalents and restricted cash at beginning of period	1,458,882			1,993			—			—			1,460,875
Cash, cash equivalents and restricted cash at end of period	$	89,095		$	36,175		$	1		$	—		$	125,271

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ACQUISITIONS (Narrative) (Details) $ / shares in Units, shares in Millions		2 Months Ended	3 Months Ended		7 Months Ended	9 Months Ended
	Feb. 17, 2017 USD ($) a $ / shares shares	Feb. 16, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 15, 2016 $ / shares
Business Acquisition [Line Items]
Acquisition costs			$ 0	$ 33,000		$ 0	$ 2,391,000
Common stock share price (in usd per share) | $ / shares	$ 19.48							$ 20.96
Vitruvian acquisition
Business Acquisition [Line Items]
Net surface area (in acres) | a	46,400
Total initial purchase price	$ 1,850,000,000
Payments to acquire businesses	$ 1,354,093,000
Equity interest issued or issuable, number of shares (in shares) | shares	23.9
Acquisition costs			$ 0	30,000		$ 0	$ 2,400,000
Goodwill	$ 0
Bargain purchase gain	$ 0
Initial purchase share price (in usd per share) | $ / shares								$ 20.96
Decrease in fair value of shares issued for acquisition, amount		$ 35,300,000
Revenue				$ 60,940,000	$ 137,706,000
Vitruvian acquisition | Indemnity escrow
Business Acquisition [Line Items]
Equity interest issued or issuable, number of shares (in shares) | shares	5.2

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ACQUISITIONS (Allocation of Purchase Price) (Details) - Vitruvian acquisition $ in Thousands	Feb. 17, 2017 USD ($)
Business Acquisition [Line Items]
Cash, net of purchase price adjustments	$ 1,354,093
Fair value of Gulfport’s common stock issued	464,639
Total consideration	1,818,732
Asset retirement obligations	(6,489)
Total fair value of net identifiable assets acquired	1,818,732
Proved properties
Business Acquisition [Line Items]
Oil and natural gas properties	362,264
Unproved properties
Business Acquisition [Line Items]
Oil and natural gas properties	$ 1,462,957

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ACQUISITIONS (Post-Acquisition Operating Results) (Details) - USD ($) $ in Thousands	3 Months Ended	7 Months Ended
	Sep. 30, 2017	Sep. 30, 2017
Vitruvian acquisition
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Revenue	$ 60,940	$ 137,706

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ACQUISITIONS (Pro Forma) (Details) - Vitruvian acquisition - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended	9 Months Ended
	Sep. 30, 2017	Sep. 30, 2017
Business Acquisition, Pro Forma Information, Nonrecurring Adjustment [Line Items]
Pro forma revenue	$ 265,498	$ 958,354
Pro forma net income	$ 18,235	$ 300,052
Pro forma earnings per share (basic) (in usd per share)	$ 0.10	$ 1.68
Pro forma earnings per share (diluted) (in usd per share)	$ 0.10	$ 1.68

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PROPERTY AND EQUIPMENT (Schedule of Property and Equipment) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Property, Plant and Equipment [Abstract]
Oil and natural gas properties	$ 9,936,714	$ 9,169,156
Office furniture and fixtures	42,302	37,369
Building	44,565	44,565
Land	5,521	4,820
Total property and equipment	10,029,102	9,255,910
Accumulated depletion, depreciation, amortization and impairment	(4,506,306)	(4,153,733)
Property and equipment, net	$ 5,522,796	$ 5,102,177

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PROPERTY AND EQUIPMENT (Narrative) (Details)	3 Months Ended		9 Months Ended
	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($) usd_per_mcf	Sep. 30, 2017 USD ($) usd_per_mcf	Dec. 31, 2017 USD ($)
Property, Plant and Equipment [Line Items]
Impairment of oil and gas properties			$ 0	$ 0
Cumulative capitalization of general and administrative costs incurred and capitalized to the full cost pool	$ 194,400,000		194,400,000
Capitalized general and administrative costs	10,600,000	$ 8,900,000	$ 28,800,000	$ 25,600,000
Depletion per Mcfe of gas equivalent (usd per Mcfe) | usd_per_mcf			0.94	0.89
Capitalized costs of oil and natural gas properties excluded from amortization	$ 2,925,145,000		$ 2,925,145,000		$ 2,912,974,000
Non-producing leases, extension term	5 years		5 years
Minimum
Property, Plant and Equipment [Line Items]
Expected number of years amortization will commence			3 years
Maximum
Property, Plant and Equipment [Line Items]
Expected number of years amortization will commence			5 years

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PROPERTY AND EQUIPMENT (Summary of Non-producing Properties Excluded from Amortization by Area) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items]
Total non-producing properties not subject to amortization	$ 2,925,145	$ 2,912,974
Utica
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items]
Total non-producing properties not subject to amortization	1,522,633
MidContinent
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items]
Total non-producing properties not subject to amortization	1,401,392
Niobrara
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items]
Total non-producing properties not subject to amortization	449
Southern Louisiana
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items]
Total non-producing properties not subject to amortization	571
Bakken
Capitalized Costs of Unproved Properties Excluded from Amortization [Line Items]
Total non-producing properties not subject to amortization	$ 100

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PROPERTY AND EQUIPMENT (Schedule of Asset Retirement Obligation) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Asset Retirement Obligation, Roll Forward Analysis [Roll Forward]
Asset retirement obligation, beginning of period			$ 75,100	$ 34,276
Liabilities incurred			1,468	11,557
Liabilities settled			(719)	(2,520)
Accretion expense	$ 1,037	$ 456	3,056	1,148
Revisions in estimated cash flows			(374)	0
Asset retirement obligation as of end of period	78,531	44,461	78,531	44,461
Less current portion	120	195	120	195	$ 120
Asset retirement obligation, long-term	$ 78,411	$ 44,266	$ 78,411	$ 44,266	$ 74,980

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EQUITY INVESMENTS (Investments Accounted for by the Equity Method) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017	May 01, 2018	Dec. 31, 2017	Dec. 31, 2014
Schedule of Equity Method Investments [Line Items]
Equity investments and investments in subsidiaries	$ 232,529		$ 232,529			$ 302,112
(Income) loss from equity method investments, net	$ (12,858)	$ 2,737	$ (35,282)	$ 33,468
Investment in Tatex Thailand II, LLC
Schedule of Equity Method Investments [Line Items]
Approximate ownership %	23.50%		23.50%
Equity investments and investments in subsidiaries	$ 0		$ 0			0
(Income) loss from equity method investments, net	$ (137)	(95)	$ (241)	(549)
Investment in Grizzly Oil Sands ULC
Schedule of Equity Method Investments [Line Items]
Approximate ownership %	24.9999%		24.9999%
Equity investments and investments in subsidiaries	$ 53,381		$ 53,381			57,641
(Income) loss from equity method investments, net	$ 275	296	$ 833	869
Investment in Timber Wolf Terminals LLC
Schedule of Equity Method Investments [Line Items]
Approximate ownership %	50.00%		50.00%
Equity investments and investments in subsidiaries	$ 0		$ 0			983
(Income) loss from equity method investments, net	$ 0	4	$ 536	8
Investment in Windsor Midstream LLC
Schedule of Equity Method Investments [Line Items]
Approximate ownership %	22.50%		22.50%
Equity investments and investments in subsidiaries	$ 39		$ 39			30
(Income) loss from equity method investments, net	$ 0	(2)	$ (9)	25,232
Investment in Stingray Cementing LLC
Schedule of Equity Method Investments [Line Items]
Approximate ownership %	0.00%		0.00%
Equity investments and investments in subsidiaries	$ 0		$ 0			0
(Income) loss from equity method investments, net	$ 0	0	$ 0	205
Investment in Stingray Energy Services LLC
Schedule of Equity Method Investments [Line Items]
Approximate ownership %	0.00%		0.00%
Equity investments and investments in subsidiaries	$ 0		$ 0			0
(Income) loss from equity method investments, net	$ 0	0	$ 0	282
Investment in Sturgeon Acquisitions LLC
Schedule of Equity Method Investments [Line Items]
Approximate ownership %	0.00%		0.00%				25.00%
Equity investments and investments in subsidiaries	$ 0		$ 0			0
(Income) loss from equity method investments, net	$ 0	0	$ 0	(71)
Investment in Mammoth Energy Services, Inc.
Schedule of Equity Method Investments [Line Items]
Approximate ownership %	22.00%		22.00%
Equity investments and investments in subsidiaries	$ 179,109		$ 179,109			165,715
(Income) loss from equity method investments, net	$ (12,996)	2,407	$ (35,708)	4,907
Investment in Strike Force Midstream LLC
Schedule of Equity Method Investments [Line Items]
Approximate ownership %	0.00%		0.00%		25.00%
Equity investments and investments in subsidiaries	$ 0		$ 0			$ 77,743
(Income) loss from equity method investments, net	$ 0	$ 127	$ (693)	$ 2,585

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EQUITY INVESMENTS (Equity Investments Balance Sheet Disclosure) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Equity Method Investments and Joint Ventures [Abstract]
Current assets	$ 481,394	$ 415,032
Noncurrent assets	1,336,604	1,542,090
Current liabilities	358,177	261,086
Noncurrent liabilities	$ 48,328	$ 148,839

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EQUITY INVESMENTS (Equity Investment Income Statement Disclosure) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Equity Method Investments and Joint Ventures [Abstract]
Gross revenue	$ 384,043	$ 160,950	$ 1,451,580	$ 357,901
Net income (loss)	$ 68,414	$ 2,101	$ 181,884	$ (109,651)

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EQUITY INVESMENTS (Narrative) (Details) $ / shares in Units, a in Thousands				1 Months Ended	3 Months Ended				9 Months Ended		12 Months Ended
	Jul. 26, 2018 USD ($) shares	Jun. 29, 2018 USD ($) shares	May 01, 2018 USD ($)	Dec. 31, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Jun. 30, 2017 USD ($)	Dec. 31, 2014 entity	Sep. 30, 2018 USD ($) a project $ / shares	Sep. 30, 2017 USD ($)	Dec. 31, 2014 a	Jun. 05, 2017 $ / shares shares	Feb. 17, 2017 $ / shares	Dec. 15, 2016 $ / shares	Apr. 30, 2015 bbl	Jun. 30, 2014 bbl
Schedule of Equity Method Investments [Line Items]
(Income) loss from equity method investments, net					$ (12,858,000)	$ 2,737,000			$ (35,282,000)	$ 33,468,000
Distributions from equity method investments									446,000	4,114,000
Share price (in usd per share) | $ / shares													$ 19.48	$ 20.96
Gain on sale of equity method investments					2,733,000	0			124,768,000	12,523,000
Proceeds from sale of equity method investments									226,487,000	0
Payments for equity method investments									2,318,000	44,844,000
Mammoth Energy Services LP
Schedule of Equity Method Investments [Line Items]
Distributions from equity method investments									1,200,000
Equity method investment, ownership interest, percent	22.00%
Shares owned (in shares) | shares	9,829,548
Gain (loss) on disposition of stock from equity method investee					2,700,000				$ 28,300,000
Share dividend (in usd per share) | $ / shares									$ 0.125
Tatex Thailand II, LLC
Schedule of Equity Method Investments [Line Items]
(Income) loss from equity method investments, net					$ (137,000)	(95,000)			$ (241,000)	(549,000)
Equity method investment, ownership interest, percent					23.50%				23.50%
Tatex Thailand III LLC
Schedule of Equity Method Investments [Line Items]
Distributions from equity method investments				$ 200,000
Grizzly Oil Sands ULC
Schedule of Equity Method Investments [Line Items]
Gas and oil area, reserve (in acres) | a									830
(Income) loss from equity method investments, net					$ 275,000	296,000			$ 833,000	869,000
Number of oil sand projects | project									3
Production volume (in bbls/day) | bbl															2,200	11,300
Other than temporary impairment loss									$ 0	0
Equity method investment, amount of cash calls, based on proportionate ownership interest									2,300,000
Equity method investments, increase (decrease) due to foreign currency translation adjustment					$ 2,900,000	6,700,000			$ (5,700,000)	12,500,000
Equity method investment, ownership interest, percent					24.9999%				24.9999%
Timber Wolf Terminals LLC
Schedule of Equity Method Investments [Line Items]
(Income) loss from equity method investments, net					$ 0	4,000			$ 536,000	8,000
Distributions from equity method investments									$ 400,000
Equity method investment, ownership interest, percent					50.00%				50.00%
Windsor Midstream LLC
Schedule of Equity Method Investments [Line Items]
(Income) loss from equity method investments, net					$ 0	(2,000)			$ (9,000)	25,232,000
Distributions from equity method investments									$ 0	500,000
Equity method investment, ownership interest, percent					22.50%				22.50%
Sturgeon Acquisitions LLC
Schedule of Equity Method Investments [Line Items]
(Income) loss from equity method investments, net					$ 0	0			$ 0	(71,000)
Equity method investment, ownership interest, percent					0.00%			25.00%	0.00%		25.00%
Gain on sale of equity method investments							$ 12,500,000
Mammoth Energy Services LP
Schedule of Equity Method Investments [Line Items]
Equity method investments, increase (decrease) due to foreign currency translation adjustment					$ 100,000	160,000			$ (200,000)	230,000
Equity method investment, ownership interest, percent								30.50%			30.50%
Number of entities contributed for ownership interest (in entities) | entity								4
Shares received from equity method investee in exchange for ownership interest (in shares) | shares												2,000,000
Share price (in usd per share) | $ / shares												$ 18.50
Strike Force Midstream LLC
Schedule of Equity Method Investments [Line Items]
(Income) loss from equity method investments, net					$ 0	$ 127,000			(693,000)	2,585,000
Distributions from equity method investments			$ 175,000,000						$ 800,000	3,600,000
Equity method investment, ownership interest, percent			25.00%		0.00%				0.00%
Gain on sale of equity method investments			$ 96,400,000
Payments for equity method investments										$ 43,000,000
Over-allotment option | Mammoth Energy Services LP
Schedule of Equity Method Investments [Line Items]
Proceeds from sale of equity method investments	$ 4,500,000	$ 47,000,000
Over-allotment option | Common Stock | Mammoth Energy Services LP
Schedule of Equity Method Investments [Line Items]
Number of shares sold (in shares) | shares	118,974	1,235,600
Phu Horm Field | Apico Llc
Schedule of Equity Method Investments [Line Items]
Gas and oil area, reserve (in acres) | a									180
Concession Acreage in Southeast Asia | Tatex Thailand III LLC
Schedule of Equity Method Investments [Line Items]
Gas and oil area, reserve (in acres) | a											245
Apico Llc | Tatex Thailand II, LLC
Schedule of Equity Method Investments [Line Items]
Ownership percentage					8.50%				8.50%
Strike Force Midstream LLC | Rice Energy Inc
Schedule of Equity Method Investments [Line Items]
Ownership percentage by parent				75.00%

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LONG-TERM DEBT (Break-Down of Long-Term Debt) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Oct. 11, 2017	Dec. 21, 2016	Oct. 14, 2016	Jun. 04, 2015	Apr. 21, 2015
Debt Instrument [Line Items]
Net unamortized debt issuance costs	$ (31,824)	$ (34,781)
Less: current maturities of long term debt	(647)	(622)
Long-term debt, net of current maturities	2,100,825	2,038,321
Construction loan
Debt Instrument [Line Items]
Net unamortized debt issuance costs	(100)
6.625% senior unsecured notes due 2023 | Senior notes
Debt Instrument [Line Items]
Long-term debt	350,000	350,000
Net unamortized debt issuance costs	$ (4,600)
Stated interest rate, percent	6.625%						6.625%
6.000% senior unsecured notes due 2024 | Senior notes
Debt Instrument [Line Items]
Long-term debt	$ 650,000	650,000
Net unamortized debt issuance costs	$ (9,000)
Stated interest rate, percent	6.00%				6.00%
6.375% senior unsecured notes due 2025 | Senior notes
Debt Instrument [Line Items]
Long-term debt	$ 600,000	600,000
Net unamortized debt issuance costs	$ (12,900)
Stated interest rate, percent	6.375%			6.375%
6.375% senior unsecured notes due 2026 | Senior notes
Debt Instrument [Line Items]
Long-term debt	$ 450,000	450,000
Net unamortized debt issuance costs	$ (5,200)
Stated interest rate, percent	6.375%		6.375%
Nova Scotia, Amegy, KeyBank | Revolving credit agreement | Revolving credit agreement
Debt Instrument [Line Items]
Long-term debt	$ 60,000	0
InterBank | Revolving credit agreement | Construction loan
Debt Instrument [Line Items]
Stated interest rate, percent						4.50%
InterBank | Letter of credit | Construction loan
Debt Instrument [Line Items]
Long-term debt	$ 23,296	$ 23,724

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LONG-TERM DEBT (Narrative) (Details)						1 Months Ended	3 Months Ended		9 Months Ended
	May 21, 2018 USD ($)	Nov. 21, 2017	May 04, 2017 USD ($) bank	Dec. 21, 2016 USD ($)	Oct. 14, 2016 USD ($)	Jan. 31, 2016	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Sep. 30, 2018 USD ($)	Sep. 30, 2017 USD ($)	Dec. 31, 2017 USD ($)	Oct. 11, 2017 USD ($)	May 05, 2017 USD ($)	Mar. 29, 2017 USD ($)	Jun. 04, 2015 USD ($)	Apr. 21, 2015 USD ($)
Debt Instrument [Line Items]
Capitalized interest expense, undeveloped properties							$ 1,600,000	$ 2,100,000	$ 4,000,000	$ 8,800,000
Debt issuance costs, net							31,824,000		31,824,000		$ 34,781,000
Construction loan
Debt Instrument [Line Items]
Debt issuance costs, net							$ 100,000		$ 100,000
Revolving credit agreement | Maximum
Debt Instrument [Line Items]
Debt covenant ratio for future EBITDAX							4.00		4.00
Revolving credit agreement | Revolving credit agreement
Debt Instrument [Line Items]
Debt covenant ratio for EBITDAX							3.00		3.00
6.000% senior unsecured notes due 2024 | Senior notes
Debt Instrument [Line Items]
Long-term debt							$ 650,000,000		$ 650,000,000		650,000,000
Stated interest rate, percent					6.00%		6.00%		6.00%
Debt instrument, amount					$ 650,000,000.0
Proceeds from issuance of Senior Notes					$ 638,900,000
Debt issuance costs, net							$ 9,000,000		$ 9,000,000
6.625% senior unsecured notes due 2023 | Senior notes
Debt Instrument [Line Items]
Long-term debt							$ 350,000,000		$ 350,000,000		350,000,000
Stated interest rate, percent							6.625%		6.625%							6.625%
Debt instrument, amount																$ 350,000,000.0
Long term debt, net of initial purchaser discounts and commissions and estimated offering expenses																$ 343,600,000
Debt issuance costs, net							$ 4,600,000		$ 4,600,000
6.375% senior unsecured notes due 2025 | Senior notes
Debt Instrument [Line Items]
Long-term debt							$ 600,000,000		$ 600,000,000		600,000,000
Stated interest rate, percent				6.375%			6.375%		6.375%
Debt instrument, amount				$ 600,000,000.0
Proceeds from issuance of Senior Notes				$ 584,700,000
Debt issuance costs, net							$ 12,900,000		$ 12,900,000
6.375% senior unsecured notes due 2026 | Senior notes
Debt Instrument [Line Items]
Long-term debt							$ 450,000,000		$ 450,000,000		450,000,000
Stated interest rate, percent							6.375%		6.375%			6.375%
Debt instrument, amount												$ 450,000,000.0
Long term debt, net of initial purchaser discounts and commissions and estimated offering expenses												$ 444,100,000
Debt issuance costs, net							$ 5,200,000		$ 5,200,000
Nova Scotia, Amegy, KeyBank | Revolving credit agreement
Debt Instrument [Line Items]
Credit facility interest rate at the eurodollar rate									3.72%
Nova Scotia, Amegy, KeyBank | Revolving credit agreement | Base rate | Minimum
Debt Instrument [Line Items]
Stated interest rate, percent							0.25%		0.25%
Nova Scotia, Amegy, KeyBank | Revolving credit agreement | Base rate | Maximum
Debt Instrument [Line Items]
Stated interest rate, percent							1.25%		1.25%
Nova Scotia, Amegy, KeyBank | Revolving credit agreement | Federal funds rate
Debt Instrument [Line Items]
Basis spread, percent									0.50%
Nova Scotia, Amegy, KeyBank | Revolving credit agreement | Eurodollar rate
Debt Instrument [Line Items]
Basis spread, percent									1.00%
Nova Scotia, Amegy, KeyBank | Revolving credit agreement | Eurodollar rate | Minimum
Debt Instrument [Line Items]
Stated interest rate, percent							1.25%		1.25%
Nova Scotia, Amegy, KeyBank | Revolving credit agreement | Eurodollar rate | Maximum
Debt Instrument [Line Items]
Stated interest rate, percent							2.25%		2.25%
Nova Scotia, Amegy, KeyBank | Revolving credit agreement | Revolving credit agreement
Debt Instrument [Line Items]
Long-term debt							$ 60,000,000		$ 60,000,000		0
Maximum borrowing capacity							1,500,000,000.0		1,500,000,000.0
Minimum acquisition payment limit														$ 50,000,000
Minimum disposition of property limit														$ 50,000,000
Borrowing base	$ 1,400,000,000		$ 700,000,000				1,200,000,000		1,200,000,000				$ 1,000,000,000
Number of banks added to syndicate (in banks) | bank			5
Increase (decrease) in interest rate	0.25%	0.50%
Remaining borrowing capacity							623,800,000		623,800,000
Nova Scotia, Amegy, KeyBank | Letter of credit | Revolving credit agreement
Debt Instrument [Line Items]
Line of credit facility, elected commitment	$ 1,000,000,000.0						1,000,000,000.0		1,000,000,000.0
Credit facility outstanding							316,200,000		316,200,000
Disposition costs, maximum expenses allowed									3,000,000.0
InterBank | Revolving credit agreement | Construction loan
Debt Instrument [Line Items]
Maximum borrowing capacity															$ 24,500,000.0
Stated interest rate, percent															4.50%
InterBank | Letter of credit | Construction loan
Debt Instrument [Line Items]
Long-term debt							$ 23,296,000		$ 23,296,000		$ 23,724,000
Required minimum down payment, percent						30.00%

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COMMON STOCK AND CHANGES IN CAPITALIZATION (Details) - USD ($)		3 Months Ended	9 Months Ended
	Feb. 17, 2017	Sep. 30, 2018	Sep. 30, 2018	May 31, 2018	Jan. 31, 2018
Class of Stock [Line Items]
Stock repurchase program, amount authorized to acquire					$ 100,000,000
Amount of shares repurchased		$ 5,000,000	$ 109,997,000
Vitruvian acquisition
Class of Stock [Line Items]
Total initial purchase price	$ 1,850,000,000
Payments to acquire businesses	$ 1,354,093,000
Equity interest issued or issuable, number of shares (in shares)	23,900,000
Vitruvian acquisition | Indemnity escrow
Class of Stock [Line Items]
Equity interest issued or issuable, number of shares (in shares)	5,200,000
Common Stock
Class of Stock [Line Items]
Shares repurchased (in shares)		400,000	10,505,469
Amount of shares repurchased			$ 105,000
Minimum
Class of Stock [Line Items]
Stock repurchase program, amount authorized to acquire				$ 100,000,000
Maximum
Class of Stock [Line Items]
Stock repurchase program, amount authorized to acquire				$ 200,000,000

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STOCK-BASED COMPENSATION (Narrative) (Details) - USD ($) $ in Millions	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Share-based Compensation [Abstract]
Stock-based compensation cost	$ 3.6	$ 2.8	$ 9.7	$ 8.0
Capitalized stock-based compensation cost	1.4	$ 1.1	3.9	$ 3.2
Unrecognized compensation expense	$ 15.5		$ 15.5
Weighted average period of expense recognition period			1 year 7 months 17 days

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STOCK-BASED COMPENSATION (Restricted Stock Award and Unit Activity) (Details) - Restricted Stock	9 Months Ended
	Sep. 30, 2018 $ / shares shares
Number of Unvested Restricted Shares
Unvested shares, beginning balance (in shares) | shares	976,027
Granted (in shares) | shares	1,197,628
Vested (in shares) | shares	(618,202)
Forfeited (in shares) | shares	(32,633)
Unvested shares, ending balance (in shares) | shares	1,522,820
Weighted Average Grant Date Fair Value
Unvested shares, beginning balance (in dollars per share) | $ / shares	$ 18.71
Granted (in dollars per share) | $ / shares	9.45
Vested (in dollars per share) | $ / shares	17.77
Forfeited (in dollars per share) | $ / shares	17.31
Unvested shares, ending balance (in dollars per share) | $ / shares	$ 11.84

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EARNINGS PER SHARE (Details) - USD ($) $ / shares in Units, $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Basic:
Net income - basic	$ 95,150	$ 18,235	$ 296,559	$ 278,626
Net income - basic (in shares)	173,057,538	182,957,416	175,776,312	178,736,569
Net income - basic (in usd per share)	$ 0.55	$ 0.10	$ 1.69	$ 1.56
Effect of dilutive securities:
Stock options and awards	$ 0	$ 0	$ 0	$ 0
Stock options and awards (in shares)	247,376	51,020	664,149	394,001
Diluted:
Net income - diluted	$ 95,150	$ 18,235	$ 296,559	$ 278,626
Net income - diluted (in shares)	173,304,914	183,008,436	176,440,461	179,130,570
Net income - diluted (in usd per share)	$ 0.55	$ 0.10	$ 1.68	$ 1.56

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COMMITTMENTS AND CONTINGENCIES (Narrative) (Details)				3 Months Ended	6 Months Ended	9 Months Ended		12 Months Ended
	Jul. 29, 2016 complaint defendant	Feb. 09, 2016 complaint defendant	Mar. 11, 1997	Sep. 30, 2018 USD ($) well	Jul. 29, 2016 complaint	Sep. 30, 2018 USD ($) well	Sep. 30, 2017 USD ($)	Dec. 31, 1997 USD ($) well
Commitments [Line Items]
Plugging and abandonment trust on the WCBB properties				$ 3,100,000		$ 3,100,000
Number of claims filed (in claims) | complaint					2
Judicial District Court for the Parish of Cameron
Commitments [Line Items]
Number of claims filed (in claims) | complaint		1
Number of defendants (in defendants) | defendant		26
Judicial District Court for the Parish of Vermillion
Commitments [Line Items]
Number of claims filed (in claims) | complaint	1
Number of defendants (in defendants) | defendant	40
Purchase commitment
Commitments [Line Items]
Future minimum commitments				154,200,000		154,200,000
Transportation commitment
Commitments [Line Items]
Firm transportation contracted with third parties				3,566,330,000		3,566,330,000
Future minimum commitments				62,012,000		62,012,000
Loss on long-term purchase commitment | Muskie Proppant LLC
Commitments [Line Items]
Non-utilization fees, accrued damages year to date				$ 1,300,000		$ 1,500,000	$ 0
Minimum
Commitments [Line Items]
Operating lease, term (in years)				1 year		1 year
WCBB
Commitments [Line Items]
Remaining interest in oil and gas property acquisition, percent								50.00%
Payments of seller's obligation to contribute								$ 18,000
Minimum number of wells to be plugged (in wells) | well								20
Tenure of minimum wells to be plugged (in years)			20 years
Number of wells plugged (in wells) | well				555		555

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COMMITTMENTS AND CONTINGENCIES (Future Commitments) (Details) $ in Thousands	Sep. 30, 2018 USD ($) MMBTU
Remaining 2018	$ 39
2019	144
2020	90
2021	38
Total	$ 311
Remaining 2018 (in mmbtu) | MMBTU	590,000
2019 (in mmbtu) | MMBTU	659,000
2020 (in mmbtu) | MMBTU	526,000
2021 (in mmbtu) | MMBTU	372,000
2022 (in mmbtu) | MMBTU	272,000
Thereafter (in mmbtu) | MMBTU	240,000
Total (in mmbtu) | MMBTU	2,659,000
Transportation commitment
Remaining 2018	$ 62,012
2019	251,644
2020	247,581
2021	246,620
2022	246,620
Thereafter	2,511,853
Total	$ 3,566,330

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DERIVATIVE INSTRUMENTS (Narrative) (Details) - 2019	9 Months Ended
	Sep. 30, 2018 MMBTU $ / MMBTU
Derivative [Line Items]
Daily volume (in MMBtu) | MMBTU	100,000
Weighted average price (in usd per MMBtu or Bbl) | $ / MMBTU	3.05

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DERIVATIVE INSTRUMENTS (Schedule of Derivative Instruments) (Details)	9 Months Ended
	Sep. 30, 2018 MMBTU $ / bbl $ / MMBTU bbl
NYMEX Henry Hub Swap - 2018
Derivative [Line Items]
Daily Volume (MMBtu/day) | MMBTU	1,010,000
Weighted average price (in usd per MMBtu or Bbl) | $ / MMBTU	3.01
NYMEX Henry Hub Swap - 2018 | Short | Call Option
Derivative [Line Items]
Daily Volume (MMBtu/day) | MMBTU	50,000
Weighted average price (in usd per MMBtu or Bbl) | $ / MMBTU	3.13
NYMEX Henry Hub Swap - 2019
Derivative [Line Items]
Daily Volume (MMBtu/day) | MMBTU	1,154,000
Weighted average price (in usd per MMBtu or Bbl) | $ / MMBTU	2.81
NYMEX Henry Hub Swap - 2019 | Short | Call Option
Derivative [Line Items]
Daily Volume (MMBtu/day) | MMBTU	30,000
Weighted average price (in usd per MMBtu or Bbl) | $ / MMBTU	3.10
NYMEX Henry Hub Swap - 2020
Derivative [Line Items]
Daily Volume (MMBtu/day) | MMBTU	204,000
Weighted average price (in usd per MMBtu or Bbl) | $ / MMBTU	2.77
ARGUS LLS Swap - 2018
Derivative [Line Items]
Daily Volume (Bbls/day) | bbl	2,000
Weighted average price (in usd per MMBtu or Bbl) | $ / bbl	56.22
ARGUS LLS Swap - 2019
Derivative [Line Items]
Daily Volume (Bbls/day) | bbl	1,000
Weighted average price (in usd per MMBtu or Bbl) | $ / bbl	59.55
NYMEX WTI Swap - 2018
Derivative [Line Items]
Daily Volume (Bbls/day) | bbl	4,500
Weighted average price (in usd per MMBtu or Bbl) | $ / bbl	53.72
NYMEX WTI Swap - 2019
Derivative [Line Items]
Daily Volume (Bbls/day) | bbl	4,000
Weighted average price (in usd per MMBtu or Bbl) | $ / bbl	58.28
Mont Belvieu C2 - 2019
Derivative [Line Items]
Daily Volume (Bbls/day) | bbl	1,000
Weighted average price (in usd per MMBtu or Bbl) | $ / bbl	18.48
Mont Belvieu C3 Swap - 2018
Derivative [Line Items]
Daily Volume (Bbls/day) | bbl	4,000
Weighted average price (in usd per MMBtu or Bbl) | $ / bbl	29.34
Mont Belvieu C3 Swap - 2019
Derivative [Line Items]
Daily Volume (Bbls/day) | bbl	4,000
Weighted average price (in usd per MMBtu or Bbl) | $ / bbl	28.87
Mont Belvieu C5 Swap - 2018
Derivative [Line Items]
Daily Volume (Bbls/day) | bbl	500
Weighted average price (in usd per MMBtu or Bbl) | $ / bbl	46.62
Mont Belvieu C5 Swap - 2019
Derivative [Line Items]
Daily Volume (Bbls/day) | bbl	500
Weighted average price (in usd per MMBtu or Bbl) | $ / bbl	54.08
Transco Zone 4 - 2018 | Long
Derivative [Line Items]
Daily Volume (MMBtu/day) | MMBTU	40,000
Weighted average price (in usd per MMBtu or Bbl) | $ / MMBTU	0.05
Transco Zone 4 - 2019 | Long
Derivative [Line Items]
Daily Volume (MMBtu/day) | MMBTU	60,000
Weighted average price (in usd per MMBtu or Bbl) | $ / MMBTU	0.05
Transco Zone 4 - 2020 | Long
Derivative [Line Items]
Daily Volume (MMBtu/day) | MMBTU	60,000
Weighted average price (in usd per MMBtu or Bbl) | $ / MMBTU	0.05

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DERIVATIVE INSTRUMENTS (Derivative Instruments in Financial Position) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
General Discussion of Derivative Instruments and Hedging Activities [Abstract]
Short-term derivative instruments - asset	$ 19,809	$ 78,847
Long-term derivative instruments - asset	3,530	8,685
Short-term derivative instruments - liability	62,601	32,534
Long-term derivative instruments - liability	$ 15,101	$ 2,989

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DERIVATIVE INSTRUMENTS (Net (Loss) Gain on Derivative Instruments) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Derivative [Line Items]
Net (loss) gain on natural gas, oil, and NGL derivatives	$ (9,663)	$ (22,860)	$ (96,737)	$ 141,588
Natural gas derivatives
Derivative [Line Items]
Net (loss) gain on natural gas, oil, and NGL derivatives	14,101	(7,077)	(26,789)	135,868
Oil derivatives
Derivative [Line Items]
Net (loss) gain on natural gas, oil, and NGL derivatives	(11,610)	(6,571)	(45,176)	12,477
Natural gas liquids derivatives
Derivative [Line Items]
Net (loss) gain on natural gas, oil, and NGL derivatives	$ (12,154)	$ (9,212)	$ (24,772)	$ (6,757)

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DERIVATIVE INSTRUMENTS (Schedule of Offsetting) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Derivative Instruments and Hedging Activities Disclosure [Abstract]
Gross assets presented in the consolidated balance sheet	$ 23,339	$ 87,532
Gross assets subject to mater netting agreement - assets	(17,053)	(22,199)
Net amount - assets	6,286	65,333
Gross liabilities presented in the consolidated balance sheet	(77,702)	(35,523)
Gross amounts subject to master netting agreement - liabilities	17,053	22,199
Net amount - liabilities	$ (60,649)	$ (13,324)

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FAIR VALUE MEASUREMENTS (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Dec. 31, 2017
Liabilities:
Asset retirement obligation capitalized	$ 1,468	$ 11,557
Level 1
Assets:
Derivative Instruments	0		$ 0
Liabilities:
Derivative Instruments	0		0
Level 2
Assets:
Derivative Instruments	23,339		87,532
Liabilities:
Derivative Instruments	77,702		35,523
Level 3
Assets:
Derivative Instruments	0		0
Liabilities:
Derivative Instruments	$ 0		$ 0

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FAIR VALUE OF FINANCIAL INSTRUMENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Debt Instrument [Line Items]
Unamortized debt issuance costs	$ 31,824	$ 34,781
Senior notes | 6.625% senior unsecured notes due 2023
Debt Instrument [Line Items]
Unamortized debt issuance costs	4,600
Senior notes | 6.000% senior unsecured notes due 2024
Debt Instrument [Line Items]
Unamortized debt issuance costs	9,000
Senior notes | 6.375% senior unsecured notes due 2025
Debt Instrument [Line Items]
Unamortized debt issuance costs	12,900
Senior notes | 6.375% senior unsecured notes due 2026
Debt Instrument [Line Items]
Unamortized debt issuance costs	5,200
Carry value | Senior notes
Debt Instrument [Line Items]
Carrying value of notes	2,000,000
Fair value | Senior notes
Debt Instrument [Line Items]
Carrying value of notes	$ 2,000,000

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REVENUE FROM CONTRACTS WITH CUSTOMERS (Details) - USD ($) $ in Millions	Sep. 30, 2018	Dec. 31, 2017
Revenue from Contract with Customer [Abstract]
Receivables from contracts with customers	$ 157.4	$ 146.8

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CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Narrative) (Details) - Senior notes - USD ($)	Oct. 11, 2017	Dec. 21, 2016	Oct. 14, 2016	Apr. 21, 2015
6.625% senior unsecured notes due 2023
Condensed Financial Statements, Captions [Line Items]
Debt instrument, amount				$ 350,000,000.0
6.000% senior unsecured notes due 2024
Condensed Financial Statements, Captions [Line Items]
Debt instrument, amount			$ 650,000,000.0
6.375% senior unsecured notes due 2025
Condensed Financial Statements, Captions [Line Items]
Debt instrument, amount		$ 600,000,000.0
6.375% senior unsecured notes due 2026
Condensed Financial Statements, Captions [Line Items]
Debt instrument, amount	$ 450,000,000.0

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CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Balance Sheets) (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017	Sep. 30, 2017	Dec. 31, 2016
Current assets:
Cash and cash equivalents	$ 124,571	$ 99,557
Accounts receivable - oil and natural gas sales	157,391	146,773
Accounts receivable - joint interest and other	39,511	35,440
Accounts receivable - related parties	79	0
Accounts receivable - intercompany	0	0
Prepaid expenses and other current assets	9,742	4,912
Short-term derivative instruments	19,809	78,847
Total current assets	351,103	365,529
Property and equipment:
Oil and natural gas properties	9,936,714	9,169,156
Other property and equipment	92,388	86,754
Accumulated depletion, depreciation, amortization and impairment	(4,506,306)	(4,153,733)
Property and equipment, net	5,522,796	5,102,177
Other assets:
Equity investments and investments in subsidiaries	232,529	302,112
Long-term derivative instruments	3,530	8,685
Deferred tax asset	0	1,208
Inventories	8,234	8,227
Other assets	17,038	19,814
Total other assets	261,331	340,046
Total assets	6,135,230	5,807,752
Current liabilities:
Accounts payable and accrued liabilities	582,464	553,609
Accounts payable - intercompany	0	0
Asset retirement obligation—current	120	120	$ 195
Short-term derivative instruments	62,601	32,534
Current maturities of long-term debt	647	622
Total current liabilities	645,832	586,885
Long-term derivative instruments	15,101	2,989
Asset retirement obligation—long-term	78,411	74,980	44,266
Deferred tax liability	3,046	0
Other non-current liabilities	0	2,963
Long-term debt, net of current maturities	2,100,825	2,038,321
Total liabilities	2,843,215	2,706,138
Stockholders’ equity:
Common stock	1,732	1,831
Paid-in capital	4,316,006	4,416,250
Accumulated other comprehensive (loss) income	(46,354)	(40,539)
Retained (deficit) earnings	(979,369)	(1,275,928)
Total stockholders’ equity	3,292,015	3,101,614	$ 2,942,661	$ 2,183,892
Total liabilities and stockholders’ equity	6,135,230	5,807,752
Reportable legal entities | Parent
Current assets:
Cash and cash equivalents	89,214	67,908
Accounts receivable - oil and natural gas sales	111,463	112,686
Accounts receivable - joint interest and other	19,066	15,435
Accounts receivable - related parties	79
Accounts receivable - intercompany	662,319	554,439
Prepaid expenses and other current assets	7,521	4,719
Short-term derivative instruments	19,809	78,847
Total current assets	909,471	834,034
Property and equipment:
Oil and natural gas properties	7,003,396	6,562,147
Other property and equipment	91,637	86,711
Accumulated depletion, depreciation, amortization and impairment	(4,506,267)	(4,153,696)
Property and equipment, net	2,588,766	2,495,162
Other assets:
Equity investments and investments in subsidiaries	2,723,140	2,361,575
Long-term derivative instruments	3,530	8,685
Deferred tax asset		1,208
Inventories	6,800	5,816
Other assets	13,018	12,483
Total other assets	2,746,488	2,389,767
Total assets	6,244,725	5,718,963
Current liabilities:
Accounts payable and accrued liabilities	464,426	416,249
Accounts payable - intercompany	240,310	63,373
Asset retirement obligation—current	120	120
Short-term derivative instruments	62,601	32,534
Current maturities of long-term debt	647	622
Total current liabilities	768,104	512,898
Long-term derivative instruments	15,101	2,989
Asset retirement obligation—long-term	65,634	63,141
Deferred tax liability	3,046
Other non-current liabilities		0
Long-term debt, net of current maturities	2,100,825	2,038,321
Total liabilities	2,952,710	2,617,349
Stockholders’ equity:
Common stock	1,732	1,831
Paid-in capital	4,316,006	4,416,250
Accumulated other comprehensive (loss) income	(46,354)	(40,539)
Retained (deficit) earnings	(979,369)	(1,275,928)
Total stockholders’ equity	3,292,015	3,101,614
Total liabilities and stockholders’ equity	6,244,725	5,718,963
Reportable legal entities | Guarantors
Current assets:
Cash and cash equivalents	35,357	31,649
Accounts receivable - oil and natural gas sales	45,928	34,087
Accounts receivable - joint interest and other	20,445	20,005
Accounts receivable - related parties	0
Accounts receivable - intercompany	240,373	63,374
Prepaid expenses and other current assets	2,221	193
Short-term derivative instruments	0	0
Total current assets	344,324	149,308
Property and equipment:
Oil and natural gas properties	2,934,047	2,607,738
Other property and equipment	751	43
Accumulated depletion, depreciation, amortization and impairment	(39)	(37)
Property and equipment, net	2,934,759	2,607,744
Other assets:
Equity investments and investments in subsidiaries		77,744
Long-term derivative instruments	0	0
Deferred tax asset		0
Inventories	1,434	2,411
Other assets	4,020	7,331
Total other assets	5,454	87,486
Total assets	3,284,537	2,844,538
Current liabilities:
Accounts payable and accrued liabilities	118,038	137,361
Accounts payable - intercompany	662,254	554,313
Asset retirement obligation—current	0	0
Short-term derivative instruments	0	0
Current maturities of long-term debt	0	0
Total current liabilities	780,292	691,674
Long-term derivative instruments	0	0
Asset retirement obligation—long-term	12,777	11,839
Deferred tax liability	0
Other non-current liabilities		2,963
Long-term debt, net of current maturities	0	0
Total liabilities	793,069	706,476
Stockholders’ equity:
Common stock	0	0
Paid-in capital	1,915,598	1,915,598
Accumulated other comprehensive (loss) income	0	0
Retained (deficit) earnings	575,870	222,464
Total stockholders’ equity	2,491,468	2,138,062
Total liabilities and stockholders’ equity	3,284,537	2,844,538
Reportable legal entities | Non-Guarantor
Current assets:
Cash and cash equivalents	0	0
Accounts receivable - oil and natural gas sales	0	0
Accounts receivable - joint interest and other	0	0
Accounts receivable - related parties	0
Accounts receivable - intercompany	0	0
Prepaid expenses and other current assets	0	0
Short-term derivative instruments	0	0
Total current assets	0	0
Property and equipment:
Oil and natural gas properties	0	0
Other property and equipment	0	0
Accumulated depletion, depreciation, amortization and impairment	0	0
Property and equipment, net	0	0
Other assets:
Equity investments and investments in subsidiaries	53,380	57,641
Long-term derivative instruments	0	0
Deferred tax asset		0
Inventories	0	0
Other assets	0	0
Total other assets	53,380	57,641
Total assets	53,380	57,641
Current liabilities:
Accounts payable and accrued liabilities	0	0
Accounts payable - intercompany	128	127
Asset retirement obligation—current	0	0
Short-term derivative instruments	0	0
Current maturities of long-term debt	0	0
Total current liabilities	128	127
Long-term derivative instruments	0	0
Asset retirement obligation—long-term	0	0
Deferred tax liability	0
Other non-current liabilities		0
Long-term debt, net of current maturities	0	0
Total liabilities	128	127
Stockholders’ equity:
Common stock	0	0
Paid-in capital	261,626	259,307
Accumulated other comprehensive (loss) income	(44,338)	(38,593)
Retained (deficit) earnings	(164,036)	(163,200)
Total stockholders’ equity	53,252	57,514
Total liabilities and stockholders’ equity	53,380	57,641
Eliminations
Current assets:
Cash and cash equivalents	0	0
Accounts receivable - oil and natural gas sales	0	0
Accounts receivable - joint interest and other	0	0
Accounts receivable - related parties	0
Accounts receivable - intercompany	(902,692)	(617,813)
Prepaid expenses and other current assets	0	0
Short-term derivative instruments	0	0
Total current assets	(902,692)	(617,813)
Property and equipment:
Oil and natural gas properties	(729)	(729)
Other property and equipment	0	0
Accumulated depletion, depreciation, amortization and impairment	0	0
Property and equipment, net	(729)	(729)
Other assets:
Equity investments and investments in subsidiaries	(2,543,991)	(2,194,848)
Long-term derivative instruments	0	0
Deferred tax asset		0
Inventories	0	0
Other assets	0	0
Total other assets	(2,543,991)	(2,194,848)
Total assets	(3,447,412)	(2,813,390)
Current liabilities:
Accounts payable and accrued liabilities	0	(1)
Accounts payable - intercompany	(902,692)	(617,813)
Asset retirement obligation—current	0	0
Short-term derivative instruments	0	0
Current maturities of long-term debt	0	0
Total current liabilities	(902,692)	(617,814)
Long-term derivative instruments	0	0
Asset retirement obligation—long-term	0	0
Deferred tax liability	0
Other non-current liabilities		0
Long-term debt, net of current maturities	0	0
Total liabilities	(902,692)	(617,814)
Stockholders’ equity:
Common stock	0	0
Paid-in capital	(2,177,224)	(2,174,905)
Accumulated other comprehensive (loss) income	44,338	38,593
Retained (deficit) earnings	(411,834)	(59,264)
Total stockholders’ equity	(2,544,720)	(2,195,576)
Total liabilities and stockholders’ equity	$ (3,447,412)	$ (2,813,390)

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CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Statements of Operations) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Revenues:
Total revenues	$ 360,962	$ 265,498	$ 939,094	$ 922,455
Costs and expenses:
Lease operating expenses	22,325	20,020	64,143	60,044
Production taxes	9,348	5,419	23,861	14,464
Midstream gathering and processing	78,913	69,372	214,546	176,258
Depreciation, depletion and amortization	119,915	106,650	352,848	254,887
General and administrative	15,848	13,065	42,955	37,922
Accretion expense	1,037	456	3,056	1,148
Acquisition expense	0	33	0	2,391
Total costs and expenses	247,386	215,015	701,409	547,114
INCOME (LOSS) FROM OPERATIONS	113,576	50,483	237,685	375,341
OTHER (INCOME) EXPENSE:
Interest expense	33,253	27,130	100,922	74,797
Interest income	(92)	(37)	(162)	(927)
Litigation settlement	917	0	917	0
Insurance proceeds	0	0	(231)	0
Gain on sale of equity method investments	(2,733)	0	(124,768)	(12,523)
(Income) loss from equity method investments and investments in subsidiaries	(12,858)	2,737	(35,282)	33,468
Other income	(61)	(345)	(201)	(863)
Total other (income) expense	18,426	29,485	(58,805)	93,952
INCOME (LOSS) BEFORE INCOME TAXES	95,150	20,998	296,490	281,389
INCOME TAX BENEFIT	0	2,763	(69)	2,763
NET INCOME (LOSS)	95,150	18,235	296,559	278,626
Parent
OTHER (INCOME) EXPENSE:
Insurance proceeds			(231)
Guarantors
OTHER (INCOME) EXPENSE:
Litigation settlement			0
Insurance proceeds			0
Non-Guarantor
OTHER (INCOME) EXPENSE:
Litigation settlement			0
Insurance proceeds			0
Reportable legal entities | Parent
Revenues:
Total revenues	235,683	188,390	596,018	710,184
Costs and expenses:
Lease operating expenses	16,502	16,019	46,926	49,891
Production taxes	4,505	4,052	13,309	10,799
Midstream gathering and processing	54,397	52,725	152,605	132,740
Depreciation, depletion and amortization	119,914	106,649	352,846	254,884
General and administrative	16,314	13,956	45,100	39,882
Accretion expense	812	335	2,397	908
Acquisition expense		(5)		0
Total costs and expenses	212,444	193,731	613,183	489,104
INCOME (LOSS) FROM OPERATIONS	23,239	(5,341)	(17,165)	221,080
OTHER (INCOME) EXPENSE:
Interest expense	34,254	27,914	103,310	79,095
Interest income	(86)	(29)	(144)	(913)
Litigation settlement	917		917
Gain on sale of equity method investments	(2,733)		(28,349)	(12,523)
(Income) loss from equity method investments and investments in subsidiaries	(104,226)	(53,880)	(387,991)	(124,446)
Other income	(37)	(344)	(1,167)	(1,522)
Total other (income) expense	(71,911)	(26,339)	(313,655)	(60,309)
INCOME (LOSS) BEFORE INCOME TAXES	95,150	20,998	296,490	281,389
INCOME TAX BENEFIT	0	2,763	(69)	2,763
NET INCOME (LOSS)	95,150	18,235	296,559	278,626
Reportable legal entities | Guarantors
Revenues:
Total revenues	125,279	77,108	343,076	212,271
Costs and expenses:
Lease operating expenses	5,823	4,001	17,217	10,153
Production taxes	4,843	1,367	10,552	3,665
Midstream gathering and processing	24,516	16,647	61,941	43,518
Depreciation, depletion and amortization	1	1	2	3
General and administrative	(467)	(892)	(2,148)	(1,963)
Accretion expense	225	121	659	240
Acquisition expense		38		2,391
Total costs and expenses	34,941	21,283	88,223	58,007
INCOME (LOSS) FROM OPERATIONS	90,338	55,825	254,853	154,264
OTHER (INCOME) EXPENSE:
Interest expense	(1,001)	(784)	(2,388)	(4,298)
Interest income	(6)	(8)	(18)	(14)
Litigation settlement	0
Gain on sale of equity method investments	0		(96,419)	0
(Income) loss from equity method investments and investments in subsidiaries	(1)	128	(694)	2,586
Other income	(24)	(1)	(34)	(241)
Total other (income) expense	(1,032)	(665)	(99,553)	(1,967)
INCOME (LOSS) BEFORE INCOME TAXES	91,370	56,490	354,406	156,231
INCOME TAX BENEFIT	0	0	0	0
NET INCOME (LOSS)	91,370	56,490	354,406	156,231
Reportable legal entities | Non-Guarantor
Revenues:
Total revenues	0	0	0	0
Costs and expenses:
Lease operating expenses	0	0	0	0
Production taxes	0	0	0	0
Midstream gathering and processing	0	0	0	0
Depreciation, depletion and amortization	0	0	0	0
General and administrative	1	1	3	3
Accretion expense	0	0	0	0
Acquisition expense		0		0
Total costs and expenses	1	1	3	3
INCOME (LOSS) FROM OPERATIONS	(1)	(1)	(3)	(3)
OTHER (INCOME) EXPENSE:
Interest expense	0	0	0	0
Interest income	0	0	0	0
Litigation settlement	0
Gain on sale of equity method investments	0		0	0
(Income) loss from equity method investments and investments in subsidiaries	275	296	833	869
Other income	0	0	0	0
Total other (income) expense	275	296	833	869
INCOME (LOSS) BEFORE INCOME TAXES	(276)	(297)	(836)	(872)
INCOME TAX BENEFIT	0	0	0	0
NET INCOME (LOSS)	(276)	(297)	(836)	(872)
Eliminations
Revenues:
Total revenues	0	0	0	0
Costs and expenses:
Lease operating expenses	0	0	0	0
Production taxes	0	0	0	0
Midstream gathering and processing	0	0	0	0
Depreciation, depletion and amortization	0	0	0	0
General and administrative	0	0	0	0
Accretion expense	0	0	0	0
Acquisition expense		0		0
Total costs and expenses	0	0	0	0
INCOME (LOSS) FROM OPERATIONS	0	0	0	0
OTHER (INCOME) EXPENSE:
Interest expense	0	0	0	0
Interest income	0	0	0	0
Litigation settlement	0		0
Insurance proceeds			0
Gain on sale of equity method investments	0		0	0
(Income) loss from equity method investments and investments in subsidiaries	91,094	56,193	352,570	154,459
Other income	0	0	1,000	900
Total other (income) expense	91,094	56,193	353,570	155,359
INCOME (LOSS) BEFORE INCOME TAXES	(91,094)	(56,193)	(353,570)	(155,359)
INCOME TAX BENEFIT	0	0	0	0
NET INCOME (LOSS)	$ (91,094)	$ (56,193)	$ (353,570)	$ (155,359)

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CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Statements of Comprehensive Income (Loss)) (Details) - USD ($) $ in Thousands	3 Months Ended		9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017	Sep. 30, 2018	Sep. 30, 2017
Condensed Financial Statements, Captions [Line Items]
Net income (loss)	$ 95,150	$ 18,235	$ 296,559	$ 278,626
Foreign currency translation adjustment	3,052	6,832	(5,815)	12,719
Other comprehensive income (loss)	3,052	6,832	(5,815)	12,719
Comprehensive income	98,202	25,067	290,744	291,345
Reportable legal entities | Parent
Condensed Financial Statements, Captions [Line Items]
Net income (loss)	95,150	18,235	296,559	278,626
Foreign currency translation adjustment	3,052	6,832	(5,815)	12,719
Other comprehensive income (loss)	3,052	6,832	(5,815)	12,719
Comprehensive income	98,202	25,067	290,744	291,345
Reportable legal entities | Guarantors
Condensed Financial Statements, Captions [Line Items]
Net income (loss)	91,370	56,490	354,406	156,231
Foreign currency translation adjustment	103	158	(70)	232
Other comprehensive income (loss)	103	158	(70)	232
Comprehensive income	91,473	56,648	354,336	156,463
Reportable legal entities | Non-Guarantor
Condensed Financial Statements, Captions [Line Items]
Net income (loss)	(276)	(297)	(836)	(872)
Foreign currency translation adjustment	2,949	6,674	(5,745)	12,487
Other comprehensive income (loss)	2,949	6,674	(5,745)	12,487
Comprehensive income	2,673	6,377	(6,581)	11,615
Eliminations
Condensed Financial Statements, Captions [Line Items]
Net income (loss)	(91,094)	(56,193)	(353,570)	(155,359)
Foreign currency translation adjustment	(3,052)	(6,832)	5,815	(12,719)
Other comprehensive income (loss)	(3,052)	(6,832)	5,815	(12,719)
Comprehensive income	$ (94,146)	$ (63,025)	$ (347,755)	$ (168,078)

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CONDENSED CONSOLIDATING FINANCIAL INFORMATION (Cash Flows) (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	$ 608,956	$ 491,733
Net cash (used in) provided by investing activities	(532,745)	(2,181,480)
Net cash (used in) provided by financing activities	(51,197)	354,143
Net increase (decrease) in cash, cash equivalents and restricted cash	25,014	(1,335,604)
Cash, cash equivalents and restricted cash at beginning of period	99,557	1,460,875
Cash, cash equivalents and restricted cash at end of period	124,571	125,271
Reportable legal entities | Parent
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	416,833	310,624
Net cash (used in) provided by investing activities	(344,330)	(2,034,554)
Net cash (used in) provided by financing activities	(51,197)	354,143
Net increase (decrease) in cash, cash equivalents and restricted cash	21,306	(1,369,787)
Cash, cash equivalents and restricted cash at beginning of period	67,908	1,458,882
Cash, cash equivalents and restricted cash at end of period	89,214	89,095
Reportable legal entities | Guarantors
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	192,123	181,108
Net cash (used in) provided by investing activities	(188,415)	(1,554,063)
Net cash (used in) provided by financing activities	0	1,407,137
Net increase (decrease) in cash, cash equivalents and restricted cash	3,708	34,182
Cash, cash equivalents and restricted cash at beginning of period	31,649	1,993
Cash, cash equivalents and restricted cash at end of period	35,357	36,175
Reportable legal entities | Non-Guarantor
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	(1)	(1)
Net cash (used in) provided by investing activities	(2,318)	(1,843)
Net cash (used in) provided by financing activities	2,319	1,845
Net increase (decrease) in cash, cash equivalents and restricted cash	0	1
Cash, cash equivalents and restricted cash at beginning of period	0	0
Cash, cash equivalents and restricted cash at end of period	0	1
Eliminations
Condensed Financial Statements, Captions [Line Items]
Net cash provided by (used in) operating activities	1	2
Net cash (used in) provided by investing activities	2,318	1,408,980
Net cash (used in) provided by financing activities	(2,319)	(1,408,982)
Net increase (decrease) in cash, cash equivalents and restricted cash	0	0
Cash, cash equivalents and restricted cash at beginning of period	0	0
Cash, cash equivalents and restricted cash at end of period	$ 0	$ 0

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RECENT ACCOUNTING PRONOUNCEMENTS (Details) - USD ($) $ in Thousands	9 Months Ended
	Sep. 30, 2018	Sep. 30, 2017
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Increase to net cash used in investing activities	$ (532,745)	$ (2,181,480)
Accounting Standards Update 2016-18
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Increase to net cash used in investing activities		185,000
Increase in restricted cash		$ 185,000

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SUBSEQUENT EVENTS (Details) - USD ($) $ in Thousands	Sep. 30, 2018	Dec. 31, 2017
Subsequent Events [Abstract]
Accounts receivable—related parties	$ 79	$ 0