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Supplemental Information on Oil and Gas Exploration and Production Activities (Unaudited) | 12 Months Ended
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Dec. 31, 2016
Extractive Industries [Abstract] |
SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES (UNAUDITED) | SUPPLEMENTAL INFORMATION ON OIL AND GAS EXPLORATION AND PRODUCTION ACTIVITIES (UNAUDITED) The Company owns a 24.9999% interest in Grizzly, which interest is shown below. The following is historical revenue and cost information relating to the Company’s oil and gas operations located entirely in the United States: Capitalized Costs Related to Oil and Gas Producing Activities
| 2016 |  | 2015
| (In thousands)
Proven properties | $ | 4,491,615 |  |  | $ | 3,606,641 |
Unproven properties | 1,580,305 |  |  | 1,817,701 |
| 6,071,920 |  |  | 5,424,342 |
Accumulated depreciation, depletion, amortization and impairment reserve | (3,778,043 | ) |  | (2,820,113 | )
Net capitalized costs | $ | 2,293,877 |  |  | $ | 2,604,229 |
Equity investment in Grizzly Oil Sands ULC |  |  |
Proven properties | $ | 70,266 |  |  | $ | 81,473 |
Unproven properties | 80,892 |  |  | 82,388 |
| 151,158 |  |  | 163,861 |
Accumulated depreciation, depletion, amortization and impairment reserve | (1,578 | ) |  | (1,531 | )
Net capitalized costs | $ | 149,580 |  |  | $ | 162,330 |
Costs Incurred in Oil and Gas Property Acquisition and Development Activities
| 2016 |  | 2015 |  | 2014
| (In thousands)
Acquisition | $ | 152,887 |  |  | $ | 810,755 |  |  | $ | 440,288 |
Development of proved undeveloped properties | 423,998 |  |  | 642,811 |  |  | 864,511 |
Exploratory | — |  |  | — |  |  | 2,249 |
Recompletions | 16,386 |  |  | 13,894 |  |  | 45,658 |
Capitalized asset retirement obligation | 10,971 |  |  | 8,800 |  |  | 2,095 |
Total | $ | 604,242 |  |  | $ | 1,476,260 |  |  | $ | 1,354,801 |
Equity investment in Grizzly Oil Sands ULC |  |  |  |  |
Acquisition | $ | 357 |  |  | $ | 396 |  |  | $ | 1,230 |
Development of proved undeveloped properties | — |  |  | 47 |  |  | 7,107 |
Exploratory | — |  |  | — |  |  | — |
Capitalized asset retirement obligation | 784 |  |  | 282 |  |  | 1,055 |
Total | $ | 1,141 |  |  | $ | 725 |  |  | $ | 9,392 |
Results of Operations for Producing Activities The following schedule sets forth the revenues and expenses related to the production and sale of oil and gas. The income tax expense is calculated by applying the current statutory tax rates to the revenues after deducting costs, which include depreciation, depletion and amortization allowances, after giving effect to the permanent differences. The results of operations exclude general office overhead and interest expense attributable to oil and gas production.
| 2016 |  | 2015 |  | 2014
| (In thousands)
Revenues | $ | 385,910 |  |  | $ | 708,990 |  |  | $ | 670,762 |
Production costs | (248,125 | ) |  | (222,805 | ) |  | (140,664 | )
Depletion | (243,098 | ) |  | (335,288 | ) |  | (263,946 | )
Impairment | (715,495 | ) |  | (1,440,418 | ) | — |  | — |
| (820,808 | ) |  | (1,289,521 | ) |  | 266,152 |
Income tax (benefit) expense |  |  |  |  |
Current | — |  |  | — |  |  | — |
Deferred | — |  |  | (220,201 | ) |  | 96,061 |
| — |  |  | (220,201 | ) |  | 96,061 |
Results of operations from producing activities | $ | (820,808 | ) |  | $ | (1,069,320 | ) |  | $ | 170,091 |
Depletion per Mcf of gas equivalent (Mcfe) | $ | 0.92 |  |  | $ | 1.68 |  |  | $ | 3.01 |
Results of Operations from equity method investment in Grizzly Oil Sands ULC |  |  |  |  |
Revenues | $ | — |  |  | $ | 1,436 |  |  | $ | 5,449 |
Production costs | (13 | ) |  | (1,549 | ) |  | (10,113 | )
Depletion | — |  |  | (625 | ) |  | (1,195 | )
| (13 | ) |  | (738 | ) |  | (5,859 | )
Income tax expense | — |  |  | — |  |  | — |
Results of operations from producing activities | $ | (13 | ) |  | $ | (738 | ) |  | $ | (5,859 | )
Oil and Gas Reserves The following table presents estimated volumes of proved developed and undeveloped oil and gas reserves as of December 31, 2016, 2015 and 2014 and changes in proved reserves during the last three years. The reserve reports use an average price equal to the unweighted arithmetic average of hydrocarbon prices received on a field-by-field basis on the first day of each month within the 12-month period ended December 31, 2016, 2015 and 2014, in accordance with guidelines of the SEC applicable to reserves estimates. Volumes for oil are stated in thousands of barrels (MBbls) and volumes for gas are stated in millions of cubic feet (MMcf). The prices used for the 2016 reserve report are $42.75 per barrel of oil, $2.48 per MMbtu and $9.91 per barrel for NGLs, adjusted by lease for transportation fees and regional price differentials, and for oil and gas reserves, respectively. The prices used at December 31, 2015 and 2014 for reserve report purposes are $50.28 per barrel, $2.59 per MMbtu and $13.21 per barrel for NGLs and $94.99 per barrel, $4.35 per MMbtu and $44.84 per barrel for NGLs, respectively. Gulfport emphasizes that the volumes of reserves shown below are estimates which, by their nature, are subject to revision. The estimates are made using all available geological and reservoir data, as well as production performance data. These estimates are reviewed annually and revised, either upward or downward, as warranted by additional performance data.
| 2016 |  | 2015 |  | 2014
| Oil |  | Gas |  | NGL |  | Oil |  | Gas |  | NGL |  | Oil |  | Gas |  | NGL
| (MBbls) |  | (MMcf) |  | (MBbls) |  | (MBbls) |  | (MMcf) |  | (MBbls) |  | (MBbls) |  | (MMcf) |  | (MBbls)
Proved Reserves |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning of the period | 6,458 |  |  | 1,560,145 |  |  | 17,736 |  |  | 9,497 |  |  | 719,006 |  |  | 26,268 |  |  | 8,346 |  |  | 146,446 |  |  | 5,675 |
Purchases in oil and gas reserves in place | — |  |  | — |  |  | — |  |  | — |  |  | 371,663 |  |  | — |  |  | 173 |  |  | 8,863 |  |  | 353 |
Extensions and discoveries | 1,217 |  |  | 1,082,220 |  |  | 7,677 |  |  | 2,413 |  |  | 997,057 |  |  | 5,486 |  |  | 4,975 |  |  | 629,151 |  |  | 22,594 |
Revisions of prior reserve estimates | (3 | ) |  | (247,703 | ) |  | (1,439 | ) |  | (2,553 | ) |  | (371,430 | ) |  | (9,594 | ) |  | (1,313 | ) |  | (6,136 | ) |  | (304 | )
Current production | (2,126 | ) |  | (227,594 | ) |  | (3,847 | ) |  | (2,899 | ) |  | (156,151 | ) |  | (4,424 | ) |  | (2,684 | ) |  | (59,318 | ) |  | (2,050 | )
End of period | 5,546 |  |  | 2,167,068 |  |  | 20,127 |  |  | 6,458 |  |  | 1,560,145 |  |  | 17,736 |  |  | 9,497 |  |  | 719,006 |  |  | 26,268 |
Proved developed reserves | 4,882 |  |  | 744,797 |  |  | 14,299 |  |  | 6,120 |  |  | 652,961 |  |  | 12,910 |  |  | 5,719 |  |  | 345,166 |  |  | 12,379 |
Proved undeveloped reserves | 664 |  |  | 1,422,271 |  |  | 5,828 |  |  | 338 |  |  | 907,184 |  |  | 4,826 |  |  | 3,778 |  |  | 373,840 |  |  | 13,889 |
Equity investment in Grizzly Oil Sands ULC |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Beginning of the period | — |  |  | — |  |  | — |  |  | 14,558 |  |  | — |  |  | — |  |  | 13,637 |  |  | — |  |  | — |
Purchases in oil and gas reserves in place | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Extensions and discoveries | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |
Revisions of prior reserve estimates | — |  |  | — |  |  | — |  |  | (14,530 | ) |  | — |  |  | — |  |  | 990 |  |  | — |  |  | — |
Current production | — |  |  | — |  |  | — |  |  | (28 | ) |  | — |  |  | — |  |  | (69 | ) |  | — |  |  | — |
End of period | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 14,558 |  |  | — |  |  | — |
Proved developed reserves | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 1,632 |  |  | — |  |  | — |
Proved undeveloped reserves | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | — |  |  | 12,926 |  |  | — |  |  | — |
In 2016, the Company experienced extensions and discoveries of 1.1 Tcfe of estimated proved reserves attributable to the continued development of the Company's Utica Shale acreage. The Company experienced downward revisions of 227.9 Bcfe due to lower commodity prices on 67 PUD locations, including the loss of 35 of the 67 PUD locations as they were no longer economic, as well as downward revisions of 17.4 Bcfe due to rescheduling the drilling timeline of four PUD locations in excess of five years of initial booking resulting in the removal of these four PUD locations. In addition, the Company experienced upward revisions of 26.7 Bcfe attributable to improved performance of 34 PUD locations as a result of 14.5% production increases due to well performance of offset producers as well as lower lease operated and capital expenditures. In 2015, the Company experienced extensions and discoveries of 1,044.5 Bcfe of estimated proved reserves attributable to the continued development of the Company's Utica Shale acreage. In addition, the Company experienced downward revisions of 444,314 MMcfe in estimated proved reserves in 2015 primarily due to the exclusion of PUD locations in its Utica and Southern Louisiana fields that became uneconomic due to the continued decline in commodity prices. In 2015, the Company also purchased 371,663 MMcfe of proved reserves as a result of acquisitions from Paloma and AEU discussed above in Note 2. In 2014, the Company experienced extensions and discoveries of 786,347 MMcfe of estimated proved reserves attributable to the development of the Company's Utica Shale acreage. In addition, the Company experienced downward revisions of 15,837 MMcfe in estimated proved reserves in 2014 primarily due to the exclusion of PUD locations in our Southern Louisiana and Utica fields that were not expected to be drilled within five years of initial booking. The Company also purchased 12,019 MMcfe of proved reserves as a result of its acquisition from Rhino Exploration LLC. Discounted Future Net Cash Flows The following tables present the estimated future cash flows, and changes therein, from Gulfport’s proven oil and gas reserves as of December 31, 2016, 2015 and 2014 using an unweighted average first-of-the-month price for the period January through December 31, 2016, 2015 and 2014. Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves
| Year ended December 31,
| 2016 |  | 2015 |  | 2014
| (In thousands)
Future cash flows | $ | 3,354,168 |  |  | $ | 3,043,450 |  |  | $ | 4,667,678 |
Future development and abandonment costs | (1,165,025 | ) |  | (877,660 | ) |  | (719,898 | )
Future production costs | (924,167 | ) |  | (941,243 | ) |  | (880,427 | )
Future production taxes | (69,447 | ) |  | (58,169 | ) |  | (71,229 | )
Future income taxes | (14,545 | ) |  | (2,648 | ) |  | (693,154 | )
Future net cash flows | 1,180,984 |  |  | 1,163,730 |  |  | 2,302,970 |
10% discount to reflect timing of cash flows | (492,944 | ) |  | (399,399 | ) |  | (875,803 | )
Standardized measure of discounted future net cash flows | $ | 688,040 |  |  | $ | 764,331 |  |  | $ | 1,427,167 |
Equity investment in Grizzly Oil Sands ULC Standardized measure of discounted cash flows |  |  |  |  |
Future cash flows | $ | — |  |  | $ | — |  |  | $ | 754,720 |
Future development and abandonment costs | — |  |  | — |  |  | (205,242 | )
Future production costs | — |  |  | — |  |  | (291,988 | )
Future production taxes | — |  |  | — |  |  | — |
Future income taxes | — |  |  | — |  |  | (11,250 | )
Future net cash flows | — |  |  | — |  |  | 246,240 |
10% discount to reflect timing of cash flows |  |  |  |  |  |  | (152,494 | )
Standardized measure of discounted future net cash flows | $ | — |  |  | $ | — |  |  | $ | 93,746 |
In order to develop its proved undeveloped reserves according to the drilling schedule used by the engineers in Gulfport’s reserve report, the Company will need to spend $401.5 million, $331.4 million and $192.7 million during years 2017, 2018 and 2019, respectively. Changes in Standardized Measure of Discounted Future Net Cash Flows Relating to Proved Oil and Gas Reserves
| Year ended December 31,
| 2016 |  | 2015 |  | 2014
| (In thousands)
Sales and transfers of oil and gas produced, net of production costs | $ | (312,291 | ) |  | $ | (486,185 | ) |  | $ | (530,098 | )
Net changes in prices, production costs, and development costs | (146,518 | ) |  | (1,412,181 | ) |  | 97,716 |
Acquisition of oil and gas reserves in place | — |  |  | 83,340 |  |  | 14,266 |
Extensions and discoveries | 186,909 |  |  | 262,895 |  |  | 790,533 |
Previously estimated development costs incurred during the period | 176,218 |  |  | 117,540 |  |  | 68,227 |
Revisions of previous quantity estimates, less related production costs | (38,448 | ) |  | (98,162 | ) |  | (37,801 | )
Accretion of discount | 76,433 |  |  | 142,717 |  |  | 57,847 |
Net changes in income taxes | (6,495 | ) |  | 412,240 |  |  | (295,226 | )
Change in production rates and other | (12,099 | ) |  | 314,960 |  |  | 683,237 |
Total change in standardized measure of discounted future net cash flows | $ | (76,291 | ) |  | $ | (662,836 | ) |  | $ | 848,701 |
Equity investment in Grizzly Oil Sands ULC Changes in standardized measure of discounted cash flows |  |  |  |  |
Sales and transfers of oil and gas produced, net of production costs | $ | — |  |  | $ | 114 |  |  | $ | 4,664 |
Net changes in prices, production costs, and development costs | — |  |  | — |  |  | (76,518 | )
Acquisition of oil and gas reserves in place | — |  |  | — |  |  | — |
Extensions and discoveries | — |  |  | — |  |  | 7,107 |
Previously estimated development costs incurred during the period | — |  |  | 47 |  |  | — |
Revisions of previous quantity estimates, less related production costs | — |  |  | (103,282 | ) |  | 10,659 |
Accretion of discount | — |  |  | 9,375 |  |  | 14,946 |
Net changes in income taxes | — |  |  | — |  |  | 9,162 |
Change in production rates and other | — |  |  | — |  |  | (25,738 | )
Total change in standardized measure of discounted future net cash flows | $ | — |  |  | $ | (93,746 | ) |  | $ | (55,718 | )

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