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DERIVATIVE INSTRUMENTS
 12 Months Ended
Dec. 31, 2024
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
DERIVATIVE INSTRUMENTS DERIVATIVE INSTRUMENTS
Natural Gas, Oil and NGL Derivative Instruments
The Company seeks to mitigate risks related to unfavorable changes in natural gas, oil and NGL prices, which are subject to significant and often volatile fluctuation, by entering into over-the-counter fixed price swaps, basis swaps, costless collars and various types of option contracts. These contracts allow the Company to mitigate the impact of declines in future natural gas, oil and NGL prices by effectively locking in a floor price for a certain level of the Company’s production. However, these hedge contracts also limit the benefit to the Company in periods of favorable price movements.
The volume of production subject to commodity derivative instruments and the mix of the instruments are frequently evaluated and adjusted by management in response to changing market conditions. Gulfport may enter into commodity derivative contracts up to limitations set forth in its Credit Facility. The Company generally enters into commodity derivative contracts for approximately 30% to 70% of its forecasted current year annual production by the end of the first quarter of each fiscal year. The Company typically enters into commodity derivative contracts for the next 12 to 36 months. Gulfport does not enter into commodity derivative contracts for speculative purposes.
The Company does not currently have any commodity derivative transactions that have margin requirements or collateral provisions that would require payments prior to the scheduled settlement dates. The Company's commodity derivative contract counterparties are typically financial institutions and energy trading firms with investment-grade credit ratings. Gulfport routinely monitors and manages its exposure to counterparty risk by requiring specific minimum credit standards for all counterparties, actively monitoring counterparties' public credit ratings and avoiding the concentration of credit exposure by transacting with multiple counterparties. The Company has master netting agreements with some counterparties that allow the offsetting of receivables and payables in a default situation. As of December 31, 2024, our commodity derivative contracts were spread among 12 counterparties.
Fixed price swaps require that the Company receive a fixed price and pay a floating market price to the counterparty for the hedged commodity. They 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 Company has entered into natural gas, crude oil and NGL fixed price swap contracts based off the NYMEX Henry Hub, NYMEX WTI and Mont Belvieu C3 indices. Below is a summary of the Company's open fixed price swap positions as of December 31, 2024:
IndexDaily VolumeWeighted
Average Price
Natural Gas(MMBtu/d)($/MMBtu)
2025NYMEX Henry Hub250,000 $3.82 
2026NYMEX Henry Hub200,000 $3.64 
Oil(Bbl/d)($/Bbl)
2025NYMEX WTI2,000 $74.50 
NGL(Bbl/d)($/Bbl)
2025Mont Belvieu C32,504 $29.97 
2026Mont Belvieu C3496 $29.51 
Each two-way costless collar has a set floor and ceiling price for the hedged production. They are settled monthly based on differences between the floor and ceiling prices specified in the contract and the referenced settlement price. If the applicable monthly price indices are outside of the ranges set by the floor and ceiling prices in the collar contracts, the Company will cash-settle the difference with the hedge counterparty. When the referenced settlement price is less than the floor price in the contract, the Company receives an amount from the counterparty based on the price difference multiplied by the hedged contract volume. Similarly, when the referenced settlement price exceeds the ceiling price specified in the contract, the Company pays the counterparty an amount based on the price difference multiplied by the hedged contract volume. No payment is due from either party if the referenced settlement price is within the range set by the floor and ceiling prices.
The Company has entered into natural gas costless collars based off the NYMEX Henry Hub index. Below is a summary of the Company's costless collar positions as of December 31, 2024:
IndexDaily VolumeWeighted Average Floor PriceWeighted Average Ceiling Price
Natural Gas(MMBtu/d)($/MMBtu)($/MMBtu)
2025NYMEX Henry Hub220,000 $3.37 $4.23 
2026NYMEX Henry Hub90,000 $3.35 $4.10 
From time to time the Company has sold natural gas call options in exchange for a premium, and used the associated premiums received to enhance the fixed price for a portion of the fixed price natural gas swaps. Each sold call option has an established ceiling price. If at the time of settlement the referenced settlement price exceeds the ceiling price, the Company pays its counterparty an amount equal to the difference between the referenced settlement price and the price ceiling multiplied by the hedged contract volumes. No payment is due from either party if the referenced settlement price is below the price ceiling. Below is a summary of the Company's open sold call option positions as of December 31, 2024:
IndexDaily VolumeWeighted Average Ceiling Price
Natural Gas(MMBtu/d)($/MMBtu)
2025NYMEX Henry Hub193,315 $5.80 
In addition, the Company has entered into natural gas basis swap positions. These instruments are arrangements that guarantee a fixed price differential to NYMEX Henry Hub from a specified delivery point. The Company receives the fixed price differential and pays the floating market price differential to the counterparty for the hedged commodity. As of December 31, 2024, the Company had the following natural gas basis swap positions open:
Gulfport PaysGulfport ReceivesDaily VolumeWeighted Average Fixed Spread
Natural Gas(MMBtu/d)($/MMBtu)
2025Rex Zone 3NYMEX Plus Fixed Spread110,000 $(0.20)
2025NGPL TXOKNYMEX Plus Fixed Spread40,000 $(0.29)
2025TETCO M2NYMEX Plus Fixed Spread230,000 $(0.96)
2025Transco Station 85NYMEX Plus Fixed Spread5,000 $0.38 
2025TGP 500NYMEX Plus Fixed Spread10,000 $0.31 
2026Rex Zone 3NYMEX Plus Fixed Spread40,000 $(0.19)
2026NGPL TXOKNYMEX Plus Fixed Spread30,000 $(0.30)
2026TETCO M2NYMEX Plus Fixed Spread130,000 $(0.98)
2026Transco Station 85NYMEX Plus Fixed Spread5,000 $0.52 
2026TGP 500NYMEX Plus Fixed Spread10,000 $0.54 
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 December 31, 2024 and December 31, 2023 (in thousands):
December 31, 2024December 31, 2023
Short-term derivative asset$58,085 $233,226 
Long-term derivative asset6,003 47,566 
Short-term derivative liability(41,889)(21,963)
Long-term derivative liability(35,081)(18,602)
Total commodity derivative position$(12,882)$240,227 
Gains and Losses
The following table presents the gain and loss recognized in net gain (loss) on natural gas, oil and NGL derivatives in the accompanying consolidated statements of operations for the years ended December 31, 2024, 2023 and 2022 (in thousands):
Year Ended December 31, 2024Year Ended December 31, 2023Year Ended December 31, 2022
Natural gas derivatives - fair value (losses) gains
$(251,019)$584,563 $32,797 
Natural gas derivatives - settlement gains (losses)
284,626 146,381 (1,002,098)
Total gains (losses) on natural gas derivatives
33,607 730,944 (969,301)
Oil and condensate derivatives - fair value gains
2,351 5,971 6,618 
Oil and condensate derivatives - settlement gains (losses)166 (3,272)(39,163)
Total gains (losses) on oil and condensate derivatives
2,517 2,699 (32,545)
NGL derivatives - fair value (losses) gains
(4,442)(2,414)14,648 
NGL derivatives - settlement (losses) gains(2,155)9,090 (12,549)
Total (losses) gains on NGL derivatives
(6,597)6,676 2,099 
Total gains (losses) on natural gas, oil and NGL derivatives
$29,527 $740,319 $(999,747)
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 (in thousands):
As of December 31, 2024
Gross Assets (Liabilities) Presented in the Consolidated Balance SheetsGross Amounts Subject to Master Netting AgreementsNet Amount
Derivative assets$64,088 $(49,343)$14,745 
Derivative liabilities$(76,970)$49,343 $(27,627)
As of December 31, 2023
Gross Assets (Liabilities) Presented in the Consolidated Balance SheetsGross Amounts Subject to Master Netting AgreementsNet Amount
Derivative assets$280,792 $(30,866)$249,926 
Derivative liabilities$(40,565)$30,866 $(9,699)
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 spread between 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.