Greetings, and welcome to Gulfport Energy Corporation Fourth Quarter 2024 Earnings Conference Call. At this time, all participants are in a listen-only mode. A brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, as a reminder, this conference is being recorded. It is now my pleasure to introduce your host, Miss Jessica Antle. Miss Antle, you may begin.

Thank you, and good morning. Welcome to Gulfport Energy Corporation's fourth quarter and full year 2024 earnings conference call. I am Jessica Antle, Vice President of Investor Relations. Speakers on today's call include John Reinhart, President and CEO, and Michael Hodges, Executive Vice President and CFO. In addition, Matthew Rucker, Executive Vice President and Chief Operating Officer, will be available for the Q&A portion of today's call. I would like to remind everybody that during this conference call, the participants may make certain forward-looking statements relating to the company's financial condition, results of operations, plans, objectives, future performance, and business. We caution you that the actual results could differ materially from those that are indicated in these forward-looking statements due to a variety of factors. Information concerning these factors can be found in the company's filings with the SEC. In addition, we may make reference to non-GAAP measures. Reconciliation to the comparable GAAP measures will be posted on our website. An updated Gulfport presentation was posted yesterday evening to our website in conjunction with the earnings announcement. Please review at your leisure. At this time, I would like to turn the call over to John Reinhart, President and CEO.

Thank you, Jessica. Good morning, everyone, and thank you for joining us on today's call. On behalf of the board of directors and all employees of Gulfport Energy, I would like to congratulate Matthew Rucker on his well-deserved promotion to Executive Vice President and Chief Operating Officer. This promotion is a recognition of the leadership Matthew has provided the company over the past couple of years in leading the operations team. The successes achieved operationally have been paramount in building a culture of continuous improvement, delivering outstanding execution efficiencies, and cost reductions throughout our development program. We are looking forward to his future contributions to the company as we continue to strive for best-in-class results for the benefit of all Gulfport Energy stakeholders. I will begin my comments discussing the 2025 development program we announced yesterday alongside earnings and then highlight a few points that define our strong 2024 performance. Building on our momentum from last year, Gulfport's 2025 development program reflects significant efficiency gains and portfolio capital allocation optimizations that will allow us to maintain flat total production and flat total base capital invested while substantially growing the company's expected liquids production by 30% year over year. The 2025 program is focused on sustaining the company's exposure to a constructive natural gas environment and delivering enhanced hydrocarbon diversification by targeting the lean condensate Utica and low-cost Marcellus condensate windows. All resulting in adjusted free cash flow generation that is estimated at today's commodity prices to be more than double compared to the 2024 results. Consistent with last year, regarding our adjusted free cash flow allocation framework, we plan to return substantially all 2025 adjusted free cash flow excluding discretionary acreage acquisitions through common stock repurchases. Total capital spend for the year is projected to be flat and in the…

Thank you, John, and good morning, everyone. I'll start by summarizing the key components of our fourth quarter financial results, which highlight the strong financial position of the company as we closed out the year and hit the ground running in 2025. Net cash provided by operating activities before changes in working capital totaled approximately $185 million during the fourth quarter, more than triple our capital expenditures for the quarter and allowing us to make significant common share repurchases all while maintaining our balance sheet strength. Reported adjusted EBITDA of $203 million during the quarter, and generated adjusted free cash flow of $125 million for the same period. Driven by robust natural gas pricing, strong liquids production, and our operating cost excellence. Said another way, we delivered our best quarter of 2024 from an adjusted free cash flow perspective and utilized the resulting cash to add incremental high-quality inventory while also buying back over 2% of our market capitalization through our share repurchase program. Needless to say, it was an outstanding quarter for Gulfport. Cash operating costs for the fourth quarter totaled $1.19 per million cubic feet equivalent, better than analyst expectations and within our full year 2024 guidance range. In addition, we are pleased to announce that we reached an agreement in early 2025 with a high-quality midstream provider for the gathering, processing, and fractionation of our Marcellus development. We'll have that solution in place for the upcoming four-well Marcellus turn in line planned for mid-2025, enhancing the development economics by enabling the extraction and sales of our valuable NGLs. The company's focus on more liquids rich activity and the resulting higher weighting of our liquids in our production mix will lead to a slight increase in our 2025 per unit LOE and midstream including gathering, processing, transportation, and…

Thank you. We will now be conducting a question and answer session. You may press star two if you would like to remove your questions from the queue. Up your handset before pressing the star keys. One moment, please, while we pull for questions. The first question comes from the line of Bert Donnes with Two Securities. Please go ahead.

Hi. Good morning, guys. The new liquids volume that you outlined for full year 2025 looks fairly strong, certainly versus us in the Street. Could you maybe talk about if that's a peak level or can you hold it flat or maybe even grow it with your current assets? And then to make it simple on the operator, I'm gonna bundle my second question into this. Does the liquids growth and focus change the way you're looking at potential bolt-ons on a gas versus liquids basis? Thanks. And does it make more sense to focus on PDP heavy or undeveloped assets?

Yeah. Hey, Bert. This is Michael. I'll take the first part, and then I think John can handle the second part of that question. I think the liquids growth, the 30% that we talked about is sustainable, absolutely. I think as you look in our investor deck, we've got a slide that lays out the cadence of our production profile for the year. I think the liquids will generally follow that same shape. Because of the timing of turning lines, we may be a little bit oilier early in the year, with that liquids production, we may be a little bit more NGL heavy later in the year. But as we look out into the future, we certainly have a lot of development this year in the liquid windows. And expect that, you know, going forward, we have the option again to continue to allocate towards those areas and deliver more liquids should we choose to do that. But the nice thing that we talked about over and over again is we have that flexibility to move between windows. And this year, it's gonna be a bit liquid rich, but we'll monitor the macro on the gas side as well, and we certainly pivot there. So I'll let John take the second part of that question.

Yeah, Bert. Thanks again for the question this morning. I think if you look historically at where the company has allocated its free cash flows, it's purchasing or undervalued shares and with acreage inventory additions, which the thesis behind that really is to use the execution prowess of the team and the great performance by the team to extract value with its undeveloped acreage. So as you think about bolt-on opportunities that may arise throughout the year, what I would tell you is while PDP is somewhat attractive, what would really be attractive to the company is a sizable undeveloped portion of any kind of bolt-on opportunity that may present itself. And it's the same philosophy as we allocate capital towards the discretionary acreage. It's really just using the prowess of the team to extract value from that. So hopefully, that answers your question. And certainly appreciate it.

Certainly does. Thanks, team.

Miss Donnes, are you done with the question?

Yep. Bundled them both in there. Thank you.

Thank you. Next question comes from the line of Tim Rezvan with Wolfe Research. Please go ahead.

Hi. This is John on for Tim. Thanks for taking our questions. Looks like you'll be turning in line around 30% more lateral footage on just 6% higher ENC cost this year. Is on top of what looks like shorter laterals for some of the TILs this year. We're wondering, do you see this front-loaded capex program as conducive to driving these capital efficiencies further and do you see it as the norm in the years ahead?

Yeah. I think, I appreciate the question, John. And, you know, the team has been very focused and we remain very focused on capital efficient employed has been a kind of mainstay tenant for the company as we assess various development options. So front-loaded capital programs certainly deliver that. And I'll tell you that a lot of care and time goes into whenever we plan out and develop these, the timing of the turn in lines specifically what window of maturity you turn a line at what time. To maximize the value of the company for the cash flows throughout the year. So yes, I think whenever you look at things from a capital efficiency perspective, that front-loaded capital program, generally speaking, we've been consistent with that through the last couple of years and I would envision us being consistent with that for the foreseeable future.

Okay. That's helpful. If I could squeeze in one more. Given your potential to generate significant free cash flow this year, it looks like the tune of $400 to $500 million or so. How do you think about future capital allocation? Maybe what does the market look like for medium-sized asset packages and the $100 million range or so and are you comfortable with just returning the majority of this cash as repurchases?

Yeah. Hey, this is Michael. I'll take the question. Thanks, John. I think our framework has been really effective for us. Right? I think we meet with our board and continuously assess all the options for our free cash flow and look at those on a rate of return basis and discuss which ones we think actually deliver the best result for our shareholders. And over the last couple of years, adding to the inventory of the company and buying the shares has both been extremely successful. And so I think that's front and center for us. That said, we always assess opportunities. There's packages around in the market that are small, medium-sized, large. They have PDP components. They have undeveloped components as John talked about on the last question. And so we take a look at those. But I think, again, with where we feel like our equity trades and the value that we think is still unrecognized, along with the opportunity organically to go out and add locations, those are high bars to clear. So, you know, we'll continue to assess those things. I think there's always those other options out there. And if the right thing comes along, then certainly look at it. But feel like what we've done so far is making a lot of sense for us and likely to continue that as we go forward.

That makes sense. Appreciate the time.

Thank you. Next question comes from the line of Carlos Escalante with Wolfe Research. Please go ahead.

Hey. Good morning, guys. How are you guys doing? Congratulations, Matt, first of all. I'm starting there purposely because my question is to you. Part of the job. If I take the Lake Seven pad as a proxy, guys, and I see how you opened the tabs on day 120, and all that it means regarding the pressure drawdown and productivity, does that say anything, or does that invite you to perhaps how you frame your Utica development moving forward versus what you did with the Lake Seven pad specifically?

Yeah. Thanks, Carlos. Appreciate that. It certainly does. I think it's something that, you know, we've talked about a long time on the choke managed program, the Utica dry gas certainly something we've had believed in. And the liquid window tested that out on the lake as you noted, you know, after 120 days, started to increase those rates a little bit more. I think it's well known in the public space that there's other peers out there that open them a lot more aggressively. So for us, it was an ideal time to test incrementally higher rates to understand what that drawdown looks like and understand how that condensate yield reacts. I think we were very encouraged by the results of that over the last several months and have currently opened up a few other wells on that pad as well. So I fully would expect us to slightly tweak, I would say, expectations moving forward on new development in that area, probably somewhere in between, but certainly for us something that we'll lean into a little bit more on the type curve shape.

Wonderful. Thank you, Matt. My second question is regarding your cadence on your allocation to your different five operational areas. So you're very specific, obviously, in how you intend to allocate your capital this year. And it comes to attention that you're signaling on the Marcellus specifically, is for eight drilled wells and you're only turning in line four. However, when you signal to the market your aggregated inventory that former sellers you mentioned incremental two years. And that's based on a cadence of twenty-five, twenty wells. Right? So wonder why you've decided to take the approach of signaling the Marcellus specifically this way when in reality, if I take 2025 as a proxy, your turning line's number is presumably less. And if so, is there a change in 2026 that we could expect to see knowing that, obviously, you're monitoring the macro at all times?

Yeah. Hey. Hey, Carlos. This is Michael. It's a good question. When we talk about inventory life, we like to frame everything in terms of corporate inventory life. So you're right in the Marcellus, we have call it fifty to sixty-five locations. And on a corporate perspective where we develop twenty to twenty-five wells a year, that's two plus two, you know, two and a half years inventory. In that area specifically though, we're looking to develop, like you mentioned, eight wells, drill each wells a year, turn in line four. You know, there's all kinds of factors that go into that capital allocation being one of them. We have a new midstream partner in there. Of course, we've got, you know, those guys have to lay lines to our pads and we've got to develop in a responsible and prudent way and so in any given area, we're gonna be developing at a different pace. And so rather than constantly talk about inventory in different windows and different manners, we just talk about it terms of corporate inventory. But the reality is we'll be developing that Marcellus asset over the next call it five to six to seven years. Utilizing those locations that I just laid out. So two and a half years, I'd call it a corporate inventory. But, yes, certainly gonna be in that area for longer than that.

Wonderful. Thank you, guys.

Thank you. Next question comes from the line of Brian Belly with Capital One Securities. Please go ahead.

Good morning, everybody. Thanks for taking my questions. Just a one here. I'm trying to get a sense for till cadence throughout the year. I know that oil kind of starts to pick up really in earnest in second quarter. NGLs follow more the third quarter. But it appears that from a footage standpoint, you're gonna tell a similar amount of footage in 2025 as you did in 2024. On the dry gas side. But we're seeing, you know, of course, I assume it's the cadence of when those tells come online on the dry gas side because it feels like there would be quite a bit of pent-up production on the gas side heading into pretty early 2026. Is that something that, you know, not to get too far ahead of ourselves for 2026, but something that we should kind of think about heading into 2026 or are those kind of in your hip pocket for 2026 to determine how you wanna bring those on?

Yeah. Brian, it's a great question. This is John. You know, to your point with the turn in line cadence, generally speaking with the front-loaded capital program, what you'll find is the production will increase throughout the year. Now that does vary depending on what maturity and what types of wells you're bringing on. For instance, if you're bringing on a lot of drag gas wells, those generally have six to nine to twelve months plateau periods that certainly play. And if you're drilling liquids wells, they have a little bit shorter plateau period. But nonetheless, you know, we try to optimize the timing of those to impact production. So you're gonna necessarily see Q2, Q3 to your point and even Q4, you know, lead into a little bit stronger production profiles for those quarters, generally speaking. This particular year, the function of our Q1 volumes was simply just natural decline. Quarter on quarter primarily. And then you'll see the cadence of that production tick up as you move throughout the year. So, you know, I wouldn't really wanna comment on 2026 yet simply because there's still a lot of optimization for the program. To do yet. But you're absolutely correct that we're positioning the company very well. Towards Q3, Q4 in a very constructive commodity environment for production levels.

Okay. Thanks. And then I guess with that leverage to grow there, the implications for capital efficiency that you picked up in 2025. Do you still see any remaining low-hanging fruit? I mean, you can only complete for so many hours in a twenty-four-hour day. You're pretty close to the cap. But is there anything else that maybe we could look forward to or hear more about as the year progresses?

No. I appreciate the question. I won't put Matt on the spot too much, but what I'll tell you is that the industry never ceases to amaze me on its continuous improvement. Things that we're doing now, we wouldn't have thought, you know, eight years ago on efficiency that we could possibly do. And that's a function of just technologies available and just getting better at what we do on the ground. So I believe there's fundamentally always opportunity for efficiencies to grow. But having said that, we're very proud of the accomplishments with the well cost, the efficiency, the fundamental, you know, core business. So I suspect there's more to come, probably more moderate gain versus these ten and twenty percenters that we're talking about. But, you know, these guys out in the field never cease to surprise me with some upside there. So I certainly appreciate the question, and Matt's got his work cut out for him too. Continuously improve on this performance.

Got it. Thank you very much for the call, John. We appreciate it.

Thank you. Next question comes from the line of Noah Hungness with Bank of America. Please go ahead.

Morning, everyone. I was just hoping for my first question you guys could kinda walk me through slide six. I think the main thing that really sticks out to us here is your ability to maintain your natural gas leverage to a constructive macro outlook while increasing liquids production. Are we kinda thinking about that the right way?

Yeah. I think so. Noah. This is Michael. I mean, I think, again, the slide is really just an indication of the potential of the company over the next five years. So we've been pretty careful not to call it guidance because we allocate capital in a very dynamic fashion as we talked about. And so we may see, you know, liquid cuts change over the years. We may see us cost current year guidance and we run it out for five years and we demonstrate that, you know, without any real aggressive assumptions, you can see that the business is capable of generating a tremendous amount of free cash flow over the next few years. So again, Matt's gonna probably deliver better capital results we hope over time and we think there's things we can do operationally to improve on the cash costs and potentially deliver, yeah, you know, better realizations on some of these numbers. But I think, yes, the answer to your question is this is we think a pretty compelling indication of what we're capable of.

Great to hear. And then for my second question, I was just kinda hoping you guys could talk about what's underwriting your change in your NGL realizations. I saw it got bumped up quite a bit here. Is that just a is that is that just because of the wells that you're turning in line this year?

Yeah. It's a good question. So a couple of things there. First of all, I want to highlight that we have a really attractive barrel especially in Appalachia. So our existing Utica production actually is a part of a contract where we reject ethane and so we've always had a strong barrel, I would call it there, just given the fact that that component doesn't exist, we get a gap Btu uplift from the ethane value. And then, you know, as you've seen propane prices and butane prices both increase, with some of the weather we've had and some of the other demand factors relative to WTI, that certainly pulls up on that percent of WTI realization. And then lastly, we announced this morning our new Marcellus agreement. And so we've been able to negotiate some favorable terms there as well, which again relates to ethane and will allow us to continue to have we think is a differentiated NGL barrel versus what a typical Bellevue barrel looks like. So just a function of our marketing team's negotiations and some really good outcomes that we've seen in those areas.

Great. Thanks so much.

Thank you. As there are no further questions, ladies and gentlemen, we have reached the end of the question and answer session. I would now like to turn the floor over to John Reinhart for closing comments.

Yep. Thank you for taking the time to join our call today. Should you have any questions, please don't hesitate to reach out to our investor relations team. We hope you have a great day. This concludes our call.

Thank you. This concludes today's teleconference. You may disconnect your lines at this time. Thank you for your participation.