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PROPERTY AND EQUIPMENT | 12 Months Ended
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Dec. 31, 2024
Property, Plant and Equipment [Abstract] |
PROPERTY AND EQUIPMENT | PROPERTY AND EQUIPMENT The major categories of property and equipment and related accumulated DD&A are as follows (in thousands):
| December 31, 2024 |  | December 31, 2023
Proved oil and natural gas properties | $ | 3,349,805 |  |  | $ | 2,904,519 |
Unproved properties | 221,650 |  |  | 204,233 |
Other depreciable property and equipment | 10,905 |  |  | 8,779 |
Land | 386 |  |  | 386 |
Total property and equipment | 3,582,746 |  |  | 3,117,917 |
Accumulated DD&A and impairment | (1,564,475) |  |  | (865,618) |
Property and equipment, net | $ | 2,018,271 |  |  | $ | 2,252,299 |
Oil and Natural Gas Properties 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 Company's oil and natural gas properties. During the year ended December 31, 2024, the net book value of the Company's oil and gas properties exceeded the calculated ceiling. As a result, the Company recorded a non-cash ceiling test impairment of its oil and natural gas properties of $30.5 million in the third quarter of 2024 and $342.7 million in the fourth quarter of 2024. The impairments resulted from declines in the full cost ceiling, which primarily resulted from the significant decrease in the 12-month average trailing price for natural gas. The Company did not record an impairment of its oil and natural gas properties during 2023 or 2022. Lower natural gas, oil and NGL prices can reduce the value of the Company’s assets. In addition to commodity prices, our production rates, levels of proved reserves, future development costs, transfers of unevaluated properties and other factors will determine the actual ceiling test calculation and impairment analysis in future periods. Given the decline of natural gas prices through December 2024, we may have additional ceiling test impairments of our oil and natural gas properties in subsequent quarters if the 12-month average trailing price does not improve from the $2.13 per MMBtu utilized in the fourth quarter 2024 ceiling test. Any such ceiling test impairment could be material to our net earnings; however, given the inter-relationship of the various judgements made to estimate proved reserves, it is impractical to estimate the potential changes in these estimates and their impact on the impairment. 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 $25.3 million, $22.8 million and $20.2 million for the years ended December 31, 2024, 2023 and 2022, 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 $0.84, $0.83 and $0.74 per Mcfe for the years ended December 31, 2024, 2023 and 2022, respectively. The following table summarizes the Company’s non-producing properties excluded from amortization by area (in thousands):
| December 31, 2024 |  | December 31, 2023
Utica & Marcellus | $ | 197,513 |  |  | $ | 177,888 |
SCOOP | 24,137 |  |  | 26,345 |
Total unproved properties | $ | 221,650 |  |  | $ | 204,233 |
The following is a summary of Gulfport’s oil and natural gas properties not subject to amortization as of December 31, 2024 (in thousands):
| Costs Incurred in
| 2024 |  | 2023 |  | 2022 |  | Prior to 2022 |  | Total
Acquisition costs | $ | 58,742 |  |  | $ | 58,002 |  |  | $ | 17,288 |  |  | $ | 82,695 |  |  | $ | 216,727 |
Exploration costs | — |  |  | — |  |  | — |  |  | — |  |  | — |
Development costs | 1,472 |  |  | 556 |  |  | — |  |  | — |  |  | 2,028 |
Capitalized interest | 2,895 |  |  | — |  |  | — |  |  | — |  |  | 2,895 |
Total oil and natural gas properties not subject to amortization | $ | 63,109 |  |  | $ | 58,558 |  |  | $ | 17,288 |  |  | $ | 82,695 |  |  | $ | 221,650 |
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 years to five years. However, the majority of the Company's non-producing leases in the Utica/Marcellus have five-year extension terms, which could extend this time frame beyond five years. Asset Retirement Obligation The following table provides a reconciliation of the Company's asset retirement obligation for the years ended December 31, 2024 and 2023 (in thousands):
| Year Ended December 31, 2024 |  | Year Ended December 31, 2023
Asset retirement obligation, beginning of period | $ | 29,941 |  |  | $ | 33,171 |
Liabilities incurred | 682 |  |  | 588 |
Liabilities settled | — |  |  | (604) |
Liabilities removed due to divestitures | — |  |  | (919) |
Accretion expense | 2,307 |  |  | 2,782 |
Revisions in estimated cash flows(1) | 19 |  |  | (5,077) |
Asset retirement obligation, end of period | $ | 32,949 |  |  | $ | 29,941 |
_____________________ (1) Revisions represent changes in the present value of liabilities resulting from changes in estimated costs.

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