Greetings. Welcome to the Gulfport Energy Corporation third quarter 2026 earnings call. At this time, all participants are in a listen-only mode. The question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. And please note, this conference is being recorded. I will now turn the conference over to Jessica Antle, Vice President of Investor Relations. Jessica, you may begin.

Thank you and good morning. Welcome to Gulfport Energy Corporation's third quarter 2026 earnings conference call. I am Jessica Antle, Vice President of Investor Relations, and with me on today's call are Nick Dell'Osso and Matthew Rucker. Nick will give a brief overview of our results and then we'll open up the teleconference for Q&A. I would like to remind everybody that during this conference call, the participants may make certain forward-looking statements. Actual results and future events could differ materially from those that are indicated in these forward-looking statements due to a variety of factors, Good morning.

and thank you for joining our third quarter earnings call. Starting off, I'd like to congratulate our team on our very strong third quarter results. Production, capital and operating costs all landed right in line with guidance. As you are aware, we forecasted total and importantly, liquids production to be up meaningfully from second quarter and we delivered on that planned ramp. In fact, liquids production represented 13% of total production in the quarter on the strength of our recent wet gas Utica tills. That higher value mix, strong realized liquids pricing, and our disciplined cost structure translated into strong EBITDA and adjusted free cash flow, both up meaningfully from the second quarter. Similarly, the fourth quarter is off to a good start, and we remain on track to execute within our original guidance ranges. Last quarter, I said our number one priority was delivering better and more consistent results for shareholders, and a clean, predictable quarter is evidence of that focus. who are pleased with the predictability of our business and remain focused on the next phase of business improvements to generate higher returns for shareholders. Our strategy will be built around three key value drivers. Improving our capital and operating efficiency, positioning our gas to respond effectively to growing and basin demand, and growing our acreage position in areas with high return potential to Gulfport shareholders. An important first step in maturing this strategy is our plan to move to continuous operations in Appalachia. We have included a slide in our presentation this morning to highlight the value of moving to a continuous two-rig program in Appalachia and the expected improvement to our DNC cost per foot and the near-term development of our highest return long lateral wet gas paths. Connected to this decision is the contracting of an electric frac fleet beginning in mid-2027, allowing us to reduce diesel exposure and total completion spend. All combined, we have line of sight to reduce our DNC cost per foot by more than 20% between now and 2028. The reduced white space in our development plan, lower costs, and higher liquids content all point to improved returns on capital and a free cash flow inflection in 2028. Just as important, a lower cost structure reduces the reinvestment rate required to hold the business flat, and that in turn raises free cash flow per share in every year that follows. not just the next one. Related to growing in-basin demand, we're very pleased to have used our firm transport access to premium markets in the Upper Midwest to sign another supply agreement at attractive pricing beginning in Q4, 2028 that supports growing demand in the region. We are maintaining floating exposure to a basis location that has historically been a premium pricing point while locking in a higher spread to that location than we have received in the past. We like this structure of retaining strategic exposure to a dynamic market we believe has further upside, while establishing ourselves as an important source of supply with an attractive spread. Combined with our 10-year agreement delivering into Ohio beginning in mid-2027, this incremental contract secures advantageous pricing for about 10% of our forecasted Appalachian production over the life of the agreements, contracted at a premium to what we have historically received for those same molecules all using firm transport we already hold. We think this is strong evidence of the demand-pull nature of Appalachia gas markets and how marketers and customers are looking to secure available supply. One of our peers recently described acreage along the Ohio River as beachfront real estate to this growing demand. If that's the beach, we have our toes in the water at Gulfport. Our core position sits in the heart of Ohio, where new gas-fired generation and data center load are just starting to show up and we have about 30 to 40% of our production sold in basin to benefit as it grows. Third, from an acreage growth perspective, we closed $83 million of Ohio state land acquisitions this quarter and are finishing out our $140 million 2026 discretionary program with 50 to 55 million of remaining spend before year end. This will continue to add valuable life to our portfolio of attractive drilling opportunities and support our ability to run a more effective development program. This program will continue into 2027 and we expect to focus on areas that have great rock and attractive upfront bonus and royalty structures leading to opportunities for greater returns. Looking at our scoop asset in Oklahoma, we're seeing some really compelling development by peer companies targeting different horizons. We believe it's prudent to reduce our activity in the scoop during 2027 and reassess our development plan in consideration of these opportunities beyond our historical primary target. We will work through the year to reset our longer-term development program to better capture the upside we believe exists in this acreage, while the reduction in scoop capital helps to fund the shift to capital in Appalachia. We will provide 2027 financial guidance concurrent with our Q4 earnings as we typically do, but want to give investors a few things to consider today as laid out in our slide deck. As we move to a more efficient continuous two-rig program in Appalachia, realize the savings from the E-Fleet and incorporate recent high-quality acreage in the wet gas window with long lateral units, our wells drilled per year and liquids content will increase and cost per lateral foot will decrease. This in turn positions us to better serve our growing demand base in Appalachia and realize higher value per unit and further creates advantages and returns on expected acquired acreage. We believe this strategy will generate attractive returns for shareholders in a more sustainable fashion over the coming periods. We're not adding activity to grow volumes for their sake. We're doing it because every dollar we invest will generate more cash. A more efficient base of operations means more efficient cash flow generation and our flexibility to allocate that cash to the highest return opportunities increases with reduction in reinvestment rate and allows us to clearly evaluate the merits of buybacks, balance sheet, acreage, and drill bit. Every dollar competes on the same basis. What it adds to cash flow and value per share. For 2026, we expect adjusted free cash flow to grow more than 15% over 2025 at $3 gas. That discipline remains true in 2027. Even with low projected gas prices and the repositioning of our capital, we expect free cash flow to remain strong. Still a double digit free cash flow yield at $3 gas. And we expect to be active across the full suite of investment opportunities. To that end, we announced today a 33% increase in our share repurchase authorization to $2 billion, having repurchased approximately $1.2 billion of our stock since the program began. And we will do all of this while maintaining a strong balance sheet. To sum up, we're lowering our cost structure and our maintenance capital, increasing cash flow per share, and allocating every dollar to what's most accretive per dollar invested. Third quarter execution was on track. Continuous operations make that execution more efficient and 2027 is the investment that drives higher returns and free cash flow inflection from 2028. I'm excited about where Gulfport is headed and I look forward to updating you on our full 2027 plan in February. Operator will now open the call for questions.

Thank you. We will now be conducting a question and answer session. If you would like to ask a question, please press star 1 on your telephone keypad. The confirmation tone will indicate your line is in the question queue. You may press star 2 if you would like to remove your question from the queue. For any participants using speaker equipment, it may be necessary to pick up your handset before pressing the star keys. Thank you. Our first question is from Bert Donnis from William Blair. You may ask your question.

Thanks, team. I really appreciate slide six. It gives us all a pretty good idea of what you're, you know, maybe thinking about next year. I couldn't help but notice the second rig is maybe targeting a smaller pad size on average. is that by design so that you could quickly adjust it up and down or is that a little bit too cute and maybe does that fit perfectly with that frac crew or would you need to adjust the frac crew if you move that around?

Yeah, Bert, this is Matt. Appreciate the question. This is an illustrative slide for 2027. We've still got a lot of work to do to shore up the budget. which we'll come out with here in a few months. By and large, we drill a mix of anywhere between three to five well pads and that's in this program. I think any shuffling around will fit very nicely with one continuous frac fleet as we do have a little bit of white space in there with some wiggle room as we shift things around. I wouldn't read too much into that and specifically around a rig drilling smaller type pads. That'll be a blend between both rigs, somewhere between three and five wells per pad.

Perfect. And then on slide eight, you put another helpful graph where you show the economics between your wet gas and your dry gas. And you noted that your turn in line schedule right now is liquids rich weighted, at least in the near term. But it looks like all it would take is a 20 cent move in gas or a 20 cent, maybe a dollar move in liquids or something like that to flip the economics the other way. Is that something that we would look at as a 28 event where you would change it? Or do you have the flexibility to maybe impact second half 27 plans based on the strip?

We're pretty flexible. We can move things around a bit. Our highest return opportunities right now as a company are clearly in the wet gas area with long laterals. So we're going to focus there initially, and I think that'll hold up through a fair amount of price sensitivity. So we have a lot of flexibility, but I've said before, I think it's really hard to think about timing your allocation of capital around Well said. Thanks, Tim.

Thank you. Our next question comes from Jacob Roberts of TPH Research. You may proceed with your question.

Good morning. Nick, I wanted to ask on the Scoop asset. You know, I think you guys are keeping your ear to the ground there in 2027 and kind of backing off a little bit, obviously. But just wondering what you are seeing from your offset peers in terms of zone delineation and resource development and kind of what you're seeing, what you're hearing, and then what do you think this means for your asset and inventory over time?

Yeah, great question. I'll start, and I think Matt has some stuff to add here. We're seeing a lot of capital form around the area. There's been some transactions recently with some pretty well-informed capital showing up in and around our position. Those producers are targeting other zones, some a little shallower than the Woodford, and some really quite productive. We're pretty interested in what we're seeing from everybody and recognize that this acreage may have more value than we've historically thought about, so we're gonna really try to assess that.

Yeah, Jake, just to add to that, I think some of the activity we're paying a lot of attention to is around the inventory. We've talked about historically that we haven't really been drilling, and so you think about the Springer, specifically the Sycamore, and then the deeper, dry part of the Woodford that we have. Inventory located there that we have not drilled historically. We've been in the condensate window of the Woodford. We're going to take the time to assess Look into the data that we have that we participate in on a non-operative basis Learn from that and then assess how we want to develop this moving forward You know, I think I talked about this on the last call but would reiterate that gas in central, Oklahoma is

does have some pretty good value as you think about the power market dynamics. It can access markets via existing pipes. You don't need incremental infrastructure to get that gas to pretty attractive markets. And given the interest in developing data centers and new power options, Oklahoma is a really good market for that. So we'll see where that goes. It's interesting optionality to have gas resource in this part of the country right now.

You kind of covered my second follow-up, so I'll pivot a bit there on the good zip code commentary. We generally agree. I guess this might be a tougher one in a bit longer term, but when we think about the illustrative 2027 and the elimination of white space with the two rigged cadence, I think your slides note 13 years of inventory at that pace, In a 2028, 2029 scenario when we hope to see much higher demand regionally than there is today, would you feel comfortable going back to a two and a half rig program where there is that white space? Or are we going to be thinking about the longer term growth dynamics of this play as trying to be as efficient as possible and waiting to add those rigs until you can kind of fill it up and maintain that 15 plus year type of inventory?

Well, you're kind of laying out a few different theoreticals there that are a bit hard to react to in a vacuum. But I would say that we always think about allocating capital based on a mid-cycle price. And so if our mid-cycle price view were to change dramatically, then your threshold for capital efficiency as to how you think about where you're willing to invest might move. I don't actually really expect that to happen in 2028 or 2029. I think more of what you see is This continued rising of the floor of gas. There will be moments where gas spikes up high and those are going to be great times for our company and for our industry. But there's a lot of gas and there's a lot of opportunities to bring gas to market. And so I'm not thinking that we're underwriting a $5 or $6 gas strip anytime soon. I do think it'll grind higher. over the next few years from, you know, we're kind of 350 people. I think it'll grind higher from there. And that can certainly ease up how you think about, you know, the hurdle rate from a well-cost perspective. But I'm really not focused on that right now. And instead, I think we as a team are focused on how do we continue to drive that cost per foot down. that opens up the ability to invest more consistently at any point in the cycle. It opens up the ability to generate more cash from every dollar you spend, which gives you more financial flexibility in how you think about every decision from returning capital to shareholders to reducing debt to adding valuable assets to the portfolio. So that's really what our focus is right now, and we'll stay pretty tight on that.

I appreciate your time. Thank you.

Thank you. Our next question is from Tim Rezvan of KeyBank Capital Markets. You may proceed with your question.

Good morning, folks. Thank you for taking our questions. Nick, I want to ask about the Marcellus. You know, Gulfport's done a pretty good job delineating, you know, the inventory in eastern Ohio, and you've talked about 100 locations. Returns seem a bit lower, but it is still a pretty intriguing kind of liquids lever. It seems likely there'd be more opportunity to drive efficiencies here given you're newer in the drilling program. So can you talk about how activity may trend going forward as like a percentage of your till count or is it sort of TBD until you get that next to well pad online?

Yeah, Tim, appreciate the question. I think you can kind of see that a little bit on slide six in the shaded bars. We give an indication of what percentage that mix looks to be for us and I think that's the right percentage right now. That's going to include really the core Marcellus that we've talked about where we have the midstream and processing agreements. For 2027 it does include the turn in lines of the two delineation wells to the north and so as we've talked about before, that's really a good test for us to understand the liquids mix and that northern acreage block that we have and the long-term productivity of the gas so we can go to market on negotiations for a gathering and processing agreement where that acreage is undedicated. So we'll follow a similar playbook as the core Marcellus. That's gonna take some time to develop and so as we progress those conversations, I wouldn't expect the, percentage of Marcellus development to go up significantly from what we've been doing until we get that in place. And then by that time, call it 29 and beyond, we'll have more drillable inventory ready to go. And that certainly, that mix could change depending on market conditions. From an efficiency standpoint, I think you're spot on. We've drilled two now, four well pads in the core area. We've seen those drilling times go down on every single pad that we've done, and we've seen our dollar per foot decrease dramatically from the first two wells that we did in the state of Ohio. I expect that to continue as we develop two more full development pads next year, and that's part of the math here on the dollar per foot that you see in our efficiency improvements for next year and beyond.

Okay. Okay. Good context. I appreciate that. Nick, in your prepared comments, you mentioned continuing discretionary leasing in 2027. I'm not trying to pin you down to a number because I know you won't give one, but is the opportunity set, do you feel like that $100 million level, is that out there? Could you transact in that or could you transact more? Just trying to understand what the opportunity set is, and I know that the board has to decide on what that budget is. What does that opportunity set look like? I guess is what I'm trying to ask. Thanks.

Good question, Tim. And you're right that it's a little early for us to give you a specific number here because we're going to work through our budgeting process as we typically would. But there's plenty of opportunity out there. We're excited about a lot of things we're seeing. Our team is super active. They keep in close contact with a number of different, directly with landowners and with other brokers and really trying to assess the opportunities. they exist across a number of different I would call them subparts of the play and will be active so you know I'm pretty optimistic about this company's ability to continue to add great acreage to this portfolio at really attractive prices and I think our governor will be how we think about capital allocation the competition for capital allocation from the balance sheet from you know the value of our stock from from all of those things so I think the governor will be, you know, what do we choose to do as opposed to are there enough opportunities? Okay. Thank you.

Thank you. Our next question is from Gabe Dowd from Truist Securities. You may proceed with your question.

Thanks, operator. Morning, Nick. Morning, Matt. Thanks for the time. Nick, you alluded to this in just your prior answer, but was curious how the buyback fits into the capital allocation framework in 27. I know there's a lot of calls on capital as you run a continuous two-week program, as you highlighted, but curious maybe where the buyback fits.

I mean, again, it's competitive, right? We will have excess free cash flow in the year and the way I think about that excess free cash flow is we will be looking hard at exactly how we implement this decision to go to two rigs and the timing of that. We will be looking hard at reducing or strengthening our balance sheet. We'll be looking hard at buybacks and we'll be looking hard at adding really valuable acreage and all of those things have tension against each other and depending on market conditions and anticipated return, of anything you're looking at, you have the opportunity to make a call. I like that. I like the ability to have a number of options for where to allocate our capital in ways that generate the highest rate of return. That's what we're paid to do as management teams and I think we have a full suite of options in front of us and we increased the authorization so that it was clear that that option remained relevant and on the table. and it will continue to compete against everything else that we do.

Okay, thank you. That makes sense. Appreciate that. And then just as a follow-up, going back to slide six, you gave us a DNC per foot and with an E-Fleet locked in and I'd imagine you contracted the second rig for a longer period of time, but just curious, like what type of inflationary pressures, if any, are kind of embedded in those DNC per foot numbers?

Yeah, great question. We've baked all of that in for 2027 based on our service contracts. I think on a standalone basis, we would have expected to see around 5% inflation for 2027 in our typical cadence of development. What's really attractive about this development plan is we've been able to offset all of those inflationary costs with our efficiency gains that we planned, both from what we're going to feel like we see on the drilling side and the frac side on being a little bit faster and better at what we do, but the ability to go sign up and lock in an E-Fleet which is significant dollar savings on an annualized basis versus us utilizing our dual fuel fleets that we've used historically. So all of that to us is really an offset and then any increase in capital you would see next year would be all activity-based, Gabe.

Right. Okay. All right. Awesome. Thanks, Matt. Thanks, Nick.

Thanks, Gabe.

Thanks, Gabe. Thank you. My next question is from Carlos Escalante of Wolf Research. You may proceed with your question.

Hey, good morning, Nick and Matt and team. That part of the question is actually a perfect segue to what we want to ask. So going back to slide six on DNC Berlal, there's some clear savings that we can see on the middle chart, but I'm trying to understand, parse through, what is the breakdown of those savings How much does it come from the continuous operations versus the electric freight fleet starting in mid-2027? And then when you think about decision triggers into early 27, are there any conditions under which you'd stay at a lower cadence versus what you anticipate today?

I'll answer the second one first. Look, we're clearly headed in this direction, and we're going to start the year with two rigs because that's the typical cadence that we have. you know I will never say never there's always some market conditions that cause you to rethink your capital allocation so that's that's clearly why we're not giving guidance today and what we want to get through winter and we want to have the full setup of our plan laid out in front of us and make sure that we're ready to commit to a full year of this activity we want to have all of our vendors lined up we want to have all of the pads ready to go and it's just a lot of detail that you have fairly well baked in November but not completely so we'll hold on giving a formal answer to that until until we give guidance, but we're clearly looking at this hard and wanting to be moving in this direction. On the breakdown, it's really hard to separate. They're very connected. The contract for the E-Fleet really becomes a lot easier for us to have taken on when we know that we're going to be moving to a more active program in Appalachia. Those fleets require commitment. That commitment, in this case, is 18 months. And so, you know, we wanted to be in a place where we felt like we had good line of sight to having this level of activity. Now, that said, we can sublease that out if we need to or work with the vendor to allow others at times if we have a pullback in activity. So, we feel really good about the way that commitment is structured, but they're interlinked.

Sure. Thank you. Appreciate that, Nick. and then perhaps just as a quick reminder to us on the North Marcellus and maybe how that relates to how you view the next two years. What is the underlying assumption of a possibly successful appraisal where you see results you like on that well that go into the 2028 target and goals and whether that is that would pose an upside case, or it would simply mean that you have more optionality in your capital allocation program moving forward.

Yeah, Carlos, I think the latter to your comment there, the way we're viewing that is we've got a plan for next year that's baked, generally speaking, with our core Marcellus. We'll delineate through completions and turn in line the two northern Marcellus Wells Early next year, we'll evaluate the production results, we'll go to market for our midstream and processing agreements, which takes some time, and then upon successful completion of that, I view it as more optionality in our development program. Our expectation is that this area will be very similar to our core Marcellus, and so you can think about the successful delineation there being an extension of the well set that we have currently that we're developing. just more flexibility and optionality and that would be something we would determine at a later date.

I appreciate the callers. Thank you, Nick and Matt.

Thank you. Our next question is from Peyton Dorn of UBS. You may proceed with your question.

Hey, good morning everybody. Thank you for having me on. You know, I thought the new gas supply agreement that you detailed was a positive. Is this something that you see Gulfport looking to expand in the future if possible? Or maybe said in a different way, is there a certain upper bound longer term in terms of how much gas you'd like to dedicate to these type of supply agreements?

That's a great question. I think about an agreement like this as essentially a hedge. We're taking gas that we've been selling at Rec Zone 3 and Chicago City Gate, and we're still going to sell it at those locations. What we've done is we've agreed to a fixed spread for our gas to that location. So the only part of the hedge that's in place is the spread we receive to those two pricing points. We still float at that point and just get a spread to it. And that spread is pretty attractive relative to what we've received in the past. So it's an uplift. And we like that. We didn't have to take on any more cost to do it. because this is with Firm Transport that we already had. So this is a really good trade for us. Again, these two contracts combined to be about 10%. So I think there's plenty more that we could do here. And we have had other inbounds from people trying to secure gas across Appalachia, thinking about the role that Biltmore plays in that. We're going to continue to listen carefully. We're going to continue to study the market and understand how it's evolving and understand where our gas has the most value, understand where we believe the most upside is and make further hedge decisions with all of that information over time. So I do think there's more upside here. I think Gulfport will be a beneficiary of this growing demand. And we talked last quarter about how some companies will do really long-term agreements that maybe aren't the right fit for a company like Gulfport, but an agreement like this, which is five or 10 years on the long end, fits much better. And again, the pricing that we can realize here is a great premium to what we've had in the past, and we're really happy with it. So open to doing more, but it has to be on the right economics.

Yeah, it makes sense. I appreciate all the detail there. And I just want to ask on the balance sheet, debt crept up a bit this quarter. with free cash flow in the fourth quarter looking like it's going to be a nice jump up. I'm curious if you're comfortable with where the current leverage stands or if it's kind of at a point where you might try to take it down a little bit into next year.

Thank you. It'll be down at year end. It'll be back more towards one times at year end or right about one times actually at year end. So, yeah, I think, you know, look, it's up this quarter. We closed on the big state lands acquisition during the quarter, and we had a lot of priorities this year. and we're generating most of our cash in the second half of the year, so it'll come back down. Still think about that one times as a good mid-cycle place to be, and so now that we've ticked above it here for a quarter, we expect it to come down.

Okay, that's helpful. Thanks for having me on.

Thank you. Our last question is from Michael Furrow of Pickering Energy Partners. You may proceed with your question.

Good morning. Thanks for taking our questions. I'd just like to start with a big picture question for you, Nick. So now that you've had more time in the seat and a chance to really kind of look under the hood, where do you see the room for the most improvement? And are there certain opportunities that are clearer to you now than they were from the outside looking in?

Yeah, I think, you know, not to beat the dead horse here, Michael, but I would just point you to slide six. I mean, this is why we laid out all this detail in the deck. This is the biggest opportunity for the company. And Matt and I are both really excited about how this positions us for the next several years of development in Ohio. We're going to be a lot more efficient. We're going to drive our cost structure lower by better vendor contracting, by better execution, by better planning. And we think there's an opportunity to continue to add great acreage to the business because we have this efficiency that's showing up and turn that acreage into great returns for our shareholders. So we think all of this is connected. And I go back to those three priorities that we're going to have, which is improve capital and operating efficiency, positioning our gas for the growing demand, and adding valuable acreage to the portfolio. And I think this move that we're making here is the real catalyst to unlock that. So that's what this is all about. And yes, my confidence has grown as I've been here on executing on exactly this plan.

Understood. Appreciate the response. And I agree it is a great slide, and the benefits look pretty clear. Just as a follow-up, we couldn't help but notice the layering out of hedges for next year, particularly the additional swaps. Do you feel like the 27 hedge book is in a good place at this stage? And additionally, does the hedge protection kind of change your decision to allocate capital towards buybacks, or do you kind of view it as a separate decision?

Separate decision, always. Hedges are, you know, they're a trade you can take on and off. But no, I'm happy with our hedge position for 27. It's, you know, I mean, given where the strip is, I'd love to have more at the average hedge price that we have. And if we were to get some cold this winter that were to pop gas prices up to an attractive level again, then I think we would hedge more. I don't really see us hedging Cal 27 at these levels. But, you know, we're always nimble around hedges. And if we like prices in a given period, we can add more. So feel pretty good about the protection we have for 27. We're continuing to monitor basis hedges, basis hedge opportunities as well as I think about 28 and 29. Appreciate the time. All right. Okay, thank you all. I appreciate everybody's time on the call this morning and all the questions. We really do have a great inflection in front of us at Gulfport. We're very excited about what's to come in 2027 and beyond and think the setup for this company is really fantastic. So look forward to seeing you all in between now and earnings as we'll be out on the road a little bit and then we will talk about 27 on the next quarter. Thanks a lot.

Ladies and gentlemen, thank you for your participation. This concludes today's teleconference. Please disconnect your lines and have a wonderful day.