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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
(Mark One)
QUARTERLY REPORT UNDER SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2022
OR
TRANSITION REPORT UNDER SECTION 13 OR 15(d) OF SECURITIES EXCHANGE ACT OF 1934
For the transition period from                    to                                    
Commission File Number 001-19514
Gulfport Energy Corporation
(Exact Name of Registrant As Specified in Its Charter)
Delaware86-3684669
(State or Other Jurisdiction of Incorporation or Organization)(IRS Employer Identification Number)
3001 Quail Springs Parkway
Oklahoma City,Oklahoma73134
(Address of Principal Executive Offices)(Zip Code)
(405) 252-4600
(Registrant Telephone Number, Including Area Code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Stock, $0.0001 par value per shareGPORThe New York Stock Exchange
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. 
    Yes  ý     No  ¨
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (Section 232.405 of this chapter) during the preceding 12 months (or such shorter period that the registrant was required to submit such files).      Yes  ý    No  ¨
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. (Check one):
Large Accelerated filer   ý     Accelerated filer   ¨       Non-accelerated filer  ¨   
Smaller reporting company   Emerging growth company  
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ¨
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).     Yes      No  ý
Indicate by check mark whether the registrant has filed all documents and reports required to be filed by Sections 12, 13 or 15(d) of the Securities Exchange Act of 1934 subsequent to the distribution of securities under a plan confirmed by a court.
 Yes  ý    No  ¨
As of April 25, 2022, 20,933,661 shares of the registrant’s common stock were outstanding.


GULFPORT ENERGY CORPORATION
TABLE OF CONTENTS
 
  Page
Item 1.
Item 2.
Item 3.
Item 4.
Item 1.
Item 1A.
Item 2.
Item 3.
Item 4.
Item 5.
Item 6.
i

DEFINITIONS
Unless the context otherwise indicates, references to “us,” “we,” “our,” “ours,” “Gulfport,” the “Company” and “Registrant” refer to Gulfport Energy Corporation and its consolidated subsidiaries. All monetary values, other than per unit and per share amounts, are stated in thousands of U.S. dollars unless otherwise specified. In addition, the following are other abbreviations and definitions of certain terms used within this Quarterly Report on Form 10-Q:
1145 Indenture. Agreement dated May 17, 2021 between the Company, UMB Bank, National Association, as trustee, and the guarantors party thereto, under section 1145 of the Bankruptcy Code for our 8.000% Senior Notes due 2026.
2026 Senior Notes. 8.000% Senior Notes due 2026.
4(a)(2) Indenture. Certain eligible holders have made an election entitling such holders to receive senior notes issued pursuant to an indenture, dated as of May 17, 2021, by and among the Company, UMB Bank, National Association, as trustee, and the guarantors party thereto, under Section 4(a)(2) of the Securities Act of 1933, as amended (the “Securities Act”) as opposed to its share of the up to $550 million aggregate principal amount of our Senior Notes due 2026. The 4(a)(2) Indenture’s terms are substantially similar to the terms of the 1145 Indenture. The primary differences between the terms of the 4(a)(2) Indenture and the terms of the 1145 Indenture are that (i) affiliates of the Issuer holding 4(a)(2) Notes are permitted to vote in determining whether the holders of the required principal amount of indenture securities have concurred in any direction or consent under the 4(a)(2) Indenture, while affiliates of the Issuer holding 1145 Notes will not be permitted to vote on such matters under the 1145 Indenture, (ii) the covenants of the 1145 Indenture (other than the payment covenant) require that the Issuer comply with the covenants of the 4(a)(2) Indenture, as amended, and (iii) the 1145 Indenture requires that the 1145 Securities be redeemed pro rata with the 4(a)(2) Securities and that the 1145 Indenture be satisfied and discharged if the 4(a)(2) Indenture is satisfied and discharged.
ASC. Accounting Standards Codification.
Bankruptcy Code. Chapter 11 of Title 11 of the United States Code.
Bbl. One stock tank barrel, or 42 U.S. gallons liquid volume, used herein in reference to crude oil or other liquid hydrocarbons.
Btu. British thermal unit, which represents the amount of energy needed to heat one pound of water by one degree Fahrenheit and can be used to describe the energy content of fuels.
Chapter 11 Cases. Voluntary petitions filed on November 13, 2020 by Gulfport Energy Corporation, Gator Marine, Inc., Gator Marine Ivanhoe, Inc., Grizzly Holdings, Inc., Gulfport Appalachia, LLC, Gulfport Midcon, LLC, Gulfport Midstream Holdings, LLC, Jaguar Resources LLC, Mule Sky LLC, Puma Resources, Inc. and Westhawk Minerals LLC.
CODI. Cancellation of indebtedness income.
Completion. The process of treating a drilled well followed by the installation of permanent equipment for the production of natural gas, oil and NGL.
Credit Facility. The Third Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A. as administrative agent and various lender parties, providing for a new money senior secured reserve-based revolving credit facility effective as of October 14, 2021.
DD&A. Depreciation, depletion and amortization.
Disputed Claims Reserve. Reserve used to settle any pending claims of unsecured creditors that were in dispute as of the effective date of the Plan.
Emergence Date. May 17, 2021.
GAAP. Accounting principles generally accepted in the United States of America.
Gross Acres or Gross Wells. Refers to the total acres or wells in which a working interest is owned.
Guarantors. All existing consolidated subsidiaries that guarantee the Company's revolving credit facility or certain other debt.
Incentive Plan. Gulfport Energy Corporation Stock Incentive Plan effective on the Emergence Date.
Indentures. Collectively, the 1145 Indenture and the 4(a)(2) Indenture governing the 2026 Senior Notes.
1

IRC. The Internal Revenue Code of 1986, as amended.
LIBOR. London Interbank Offered Rate.
LOE. Lease operating expenses.
MBbl. One thousand barrels of crude oil, condensate or natural gas liquids.
Mcf. One thousand cubic feet of natural gas.
Mcfe. One thousand cubic feet of natural gas equivalent.
MMBtu. One million British thermal units.
MMcf. One million cubic feet of natural gas.
MMcfe. One million cubic feet of natural gas equivalent.
Natural Gas Liquids (NGL). Hydrocarbons in natural gas that are separated from the gas as liquids through the process of absorption, condensation, adsorption or other methods in gas processing or cycling plants. Natural gas liquids primarily include ethane, propane, butane, isobutene, pentane, hexane and natural gasoline.
NYMEX. New York Mercantile Exchange.
Plan. The Amended Joint Chapter 11 Plan of Reorganization of Gulfport Energy Corporation and Its Debtor Subsidiaries.
Predecessor Quarter. Period from January 1, 2021 through March 31, 2021.
Repurchase Program. A stock repurchase program to acquire up to $100 million of Gulfport's outstanding common stock. It is authorized to extend through December 31, 2022, and may be suspended from time to time, modified, extended or discontinued by the board of directors at any time.
SCOOP. Refers to the South Central Oklahoma Oil Province, a term used to describe a defined area that encompasses many of the top hydrocarbon producing counties in Oklahoma within the Anadarko basin. The SCOOP play mainly targets the Devonian to Mississippian aged Woodford, Sycamore and Springer formations. Our acreage is primarily in Garvin, Grady and Stephens Counties.
SEC. The United States Securities and Exchange Commission.
Section 382. Internal Revenue Code Section 382.
SOFR. Secured Overnight Financing Rate.
Successor Quarter. Period from January 1, 2022 through March 31, 2022.
Utica. Refers to the Utica Play that includes the hydrocarbon bearing rock formations commonly referred to as the Utica formation located in the Appalachian Basin of the United States and Canada. Our acreage is located primarily in Belmont, Harrison, Jefferson and Monroe Counties in eastern Ohio.
Working Interest (WI). The operating interest which gives the owner the right to drill, produce and conduct operating activities on the property and a share of production.
WTI. Refers to West Texas Intermediate.
2

Cautionary Note Regarding Forward-Looking Statements
This Form 10-Q may include forward-looking statements within the meaning of Section 27A of the Securities Act of 1933, as amended (the "Securities Act"), Section 21E of the Securities Exchange Act of 1934, as amended (the "Exchange Act"), and the Private Securities Litigation Reform Act of 1995, that are subject to risks and uncertainties. These statements involve known and unknown risks, uncertainties and other factors that may cause our actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements. In some cases, you can identify forward looking statements by terms such as “may,” “will,” “should,” “could,” “would,” “expects,” “plans,” “anticipates,” “intends,” “believes,” “estimates,” “projects,” “predicts,” “potential” and similar expressions intended to identify forward-looking statements. All statements, other than statements of historical facts, included in this Form 10-Q that address activities, events or developments that we expect or anticipate will or may occur in the future, including the expected impact of the novel coronavirus disease (COVID-19) pandemic and the war in Ukraine on our business, our industry and the global economy, estimated future net revenues from oil and gas reserves and the present value thereof, future capital expenditures (including the amount and nature thereof), share repurchases, business strategy and measures to implement strategy, competitive strength, goals, expansion and growth of our business and operations, plans, references to future success, reference to intentions as to future matters and other such matters are forward-looking statements.
These forward-looking statements are largely based on our expectations and beliefs concerning future events, which reflect estimates and assumptions made by our management. These estimates and assumptions reflect our best judgment based on currently known market conditions and other factors relating to our operations and business environment, all of which are difficult to predict and many of which are beyond our control.
Although we believe our estimates and assumptions to be reasonable, they are inherently uncertain and involve a number of risks and uncertainties that are beyond our control. In addition, management's assumptions about future events may prove to be inaccurate. Management cautions all readers that the forward-looking statements contained in this Form 10-Q are not guarantees of future performance, and we cannot assure any reader that those statements will be realized or the forward-looking events and circumstances will occur. Actual results may differ materially from those anticipated or implied in the forward-looking statements due to the factors listed in Item 1A. “Risk Factors” and Item 7. “Management's Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report on Form 10-K for the year ended December 31, 2021 and elsewhere in this Form 10-Q. All forward-looking statements speak only as of the date of this Form 10-Q.
All forward-looking statements, expressed or implied, included in this Quarterly Report are expressly qualified in their entirety by this cautionary statement. This cautionary statement should also be considered in connection with any subsequent written or oral forward-looking statements that we or persons acting on our behalf may issue.
Except as otherwise required by applicable law, we disclaim any duty to update any forward-looking statements, all of which are expressly qualified by the statements in this section, to reflect events or circumstances after the date of this Quarterly Report.
We may use the Investors section of our website (www.gulfportenergy.com) to communicate with investors. It is possible that the financial and other information posted there could be deemed to be material information. The information on our website is not part of this Quarterly Report on Form 10-Q.


3

GULFPORT ENERGY CORPORATION
CONSOLIDATED BALANCE SHEETS
(In thousands)
Successor
March 31, 2022December 31, 2021
Assets(Unaudited)
Current assets:
Cash and cash equivalents$5,898 $3,260 
Accounts receivable—oil and natural gas sales206,869 232,854 
Accounts receivable—joint interest and other38,480 20,383 
Prepaid expenses and other current assets5,348 12,359 
Short-term derivative instruments15,720 4,695 
Total current assets272,315 273,551 
Property and equipment:
Oil and natural gas properties, full-cost method
Proved oil and natural gas properties2,030,289 1,917,833 
Unproved properties203,678 211,007 
Other property and equipment5,420 5,329 
Total property and equipment2,239,387 2,134,169 
Less: accumulated depletion, depreciation and amortization(340,709)(278,341)
Total property and equipment, net1,898,678 1,855,828 
Other assets:
Long-term derivative instruments20,696 18,664 
Operating lease assets274 322 
Other assets19,557 19,867 
Total other assets40,527 38,853 
Total assets$2,211,520 $2,168,232 
Liabilities, Mezzanine Equity and Stockholders’ Equity
Current liabilities:
Accounts payable and accrued liabilities$398,067 $394,011 
Short-term derivative instruments820,255 240,735 
Current portion of operating lease liabilities173 182 
Total current liabilities1,218,495 634,928 
Non-current liabilities:
Long-term derivative instruments281,622 184,580 
Asset retirement obligation28,972 28,264 
Non-current operating lease liabilities100 140 
Long-term debt573,996 712,946 
Total non-current liabilities884,690 925,930 
Total liabilities$2,103,185 $1,560,858 
Commitments and contingencies (Note 7)
Mezzanine Equity:
Preferred stock - $0.0001 par value, 110.0 thousand shares authorized, 57.9 thousand issued and outstanding at March 31, 2022 and December 31, 2021
57,878 57,896 
Stockholders’ Equity:
Common stock - $0.0001 par value, 42.0 million shares authorized, 21.1 million issued and outstanding at March 31, 2022, and 20.6 million issued and outstanding at December 31, 2021
2 2 
Additional paid-in capital662,573 692,521 
Common stock held in reserve, 62 thousand shares at March 31, 2022, and 938 thousand shares at December 31, 2021
(1,996)(30,216)
Accumulated deficit(604,804)(112,829)
Treasury stock, at cost - 59.6 thousand at March 31, 2022, and no shares at December 31, 2021
(5,318) 
Total stockholders’ equity $50,457 $549,478 
Total liabilities, mezzanine equity and stockholders’ equity $2,211,520 $2,168,232 

See accompanying notes to consolidated financial statements.
4

GULFPORT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF OPERATIONS
(In thousands)
(Unaudited) 
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
REVENUES:
Natural gas sales$405,212 $235,321 
Oil and condensate sales30,239 18,239 
Natural gas liquid sales45,284 23,776 
Net loss on natural gas, oil and NGL derivatives(788,551)(29,978)
Total Revenues(307,816)247,358 
OPERATING EXPENSES:
Lease operating expenses17,644 12,653 
Taxes other than income12,468 8,704 
Transportation, gathering, processing and compression84,792 105,867 
Depreciation, depletion and amortization62,284 41,147 
Impairment of other property and equipment 14,568 
General and administrative expenses7,105 12,757 
Accretion expense692 805 
Total Operating Expenses184,985 196,501 
(LOSS) INCOME FROM OPERATIONS(492,801)50,857 
OTHER (INCOME) EXPENSE:
Interest expense13,984 3,261 
Loss from equity method investments, net 342 
Reorganization items, net 38,721 
Other, net(14,810)(247)
Total Other (Income) Expense(826)42,077 
(LOSS) INCOME BEFORE INCOME TAXES(491,975)8,780 
Income tax expense  
NET (LOSS) INCOME$(491,975)$8,780 
Dividends on preferred stock$(1,447)$ 
NET (LOSS) INCOME ATTRIBUTABLE TO COMMON STOCKHOLDERS$(493,422)$8,780 
NET (LOSS) INCOME PER COMMON SHARE:
Basic$(23.23)$0.05 
Diluted$(23.23)$0.05 
Weighted average common shares outstanding—Basic21,242 160,813 
Weighted average common shares outstanding—Diluted21,242 160,813 
 See accompanying notes to consolidated financial statements.
5

GULFPORT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF COMPREHENSIVE (LOSS) INCOME
(In thousands)
(Unaudited)

SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Net (loss) income$(491,975)$8,780 
Foreign currency translation adjustment 2,570 
Other comprehensive income 2,570 
Comprehensive (loss) income$(491,975)$11,350 


See accompanying notes to consolidated financial statements.

6

GULFPORT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF STOCKHOLDERS’ EQUITY (DEFICIT)
(In thousands)
(Unaudited)
Common Stock Held in ReserveTreasury StockPaid-in
Capital
Accumulated Other
Comprehensive (Loss) Income
Retained Earnings (Accumulated
Deficit)
Total Stockholders’
Equity (Deficit)
Common Stock
SharesAmountSharesAmount
Balance at January 1, 2021 (Predecessor)160,762 $1,607  $  $4,213,752 $(43,000)$(4,472,859)$(300,500)
Net income— — — — — — — 8,780 8,780 
Other comprehensive income— — — — — — 2,570 — 2,570 
Stock compensation— — — — — 1,419 — — 1,419 
Shares repurchased(86)(1)— — — (7)— — (8)
Issuance of restricted stock203 3 — — — (2)— — 1 
Balance at March 31, 2021 (Predecessor)160,878 $1,609  $ $ $4,215,162 $(40,430)$(4,464,079)$(287,738)

Common Stock Held in ReserveTreasury StockPaid-in
Capital
Accumulated Other
Comprehensive (Loss) Income
Retained Earnings (Accumulated
Deficit)
Total Stockholders’
Equity (Deficit)
Common Stock
SharesAmountSharesAmount
Balance at January 1, 2022 (Successor)21,537 $2 (938)$(30,216)$ $692,521 $ $(112,829)$549,478 
Net loss— — — — — — — (491,975)(491,975)
Conversion of preferred stock1 — — — — 18 — — 18 
Stock compensation— — — — — 1,755 — — 1,755 
Shares repurchased(378)— — — (5,318)(30,194)— — (35,512)
Issuance of common stock held in reserve— — 876 28,220 — — — — 28,220 
Issuance of restricted stock2 — — — — (80)— — (80)
Dividends on preferred stock— — — — — (1,447)— — (1,447)
Balance at March 31, 2022 (Successor)21,162 $2 (62)$(1,996)$(5,318)$662,573 $ $(604,804)$50,457 

 See accompanying notes to consolidated financial statements.

7

GULFPORT ENERGY CORPORATION
CONSOLIDATED STATEMENTS OF CASH FLOWS
(In thousands)
(Unaudited)

SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Cash flows from operating activities:
Net (loss) income$(491,975)$8,780 
Adjustments to reconcile net loss to net cash provided by operating activities:
Depletion, depreciation and amortization62,284 41,147 
Impairment of other property and equipment 14,568 
Loss from equity investments 342 
Net loss on derivative instruments788,551 29,978 
Net cash (payments) receipts on settled derivative instruments(125,046)125 
Other2,690 1,574 
Changes in operating assets and liabilities, net17,192 26,661 
Net cash provided by operating activities253,696 123,175 
Cash flows from investing activities:
Additions to oil and natural gas properties(80,271)(56,895)
Proceeds from sale of oil and natural gas properties 15 
Other(7)(296)
Net cash used in investing activities(80,278)(57,176)
Cash flows from financing activities:
Principal payments on pre-petition revolving credit facility (2,202)
Borrowings on pre-petition revolving credit facility 26,050 
Principal payments on Credit Facility(456,000) 
Borrowings on Credit Facility317,000  
Repurchase of common stock under Repurchase Program(30,192) 
Dividends on preferred stock(1,447) 
Other(141)(7)
Net cash (used in) provided by financing activities(170,780)23,841 
Net increase in cash, cash equivalents and restricted cash2,638 89,840 
Cash, cash equivalents and restricted cash at beginning of period3,260 89,861 
Cash, cash equivalents and restricted cash at end of period$5,898 $179,701 
 See accompanying notes to consolidated financial statements.
8

GULFPORT ENERGY CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1.BASIS OF PRESENTATION
Description of Company
Gulfport Energy Corporation (the "Company" or "Gulfport") is an independent natural gas-weighted exploration and production company focused on the production of natural gas, crude oil and NGL in the United States. The Company's principal properties are located in eastern Ohio targeting the Utica and in central Oklahoma targeting the SCOOP Woodford and SCOOP Springer formations. Gulfport filed for voluntary reorganization under Chapter 11 of the Bankruptcy Code on November 13, 2020, and subsequently operated as a debtor-in-possession, in accordance with applicable provisions of the Bankruptcy Code, until its emergence on May 17, 2021. The Company refers to the post-emergence reorganized organization in the condensed financial statements and footnotes as the "Successor" for periods subsequent to May 17, 2021, and the pre-emergence organization as "Predecessor" for periods on or prior to May 17, 2021.
Basis of Presentation
The accompanying unaudited condensed consolidated financial statements of Gulfport were prepared in accordance with GAAP and the rules and regulations of the SEC.
This Quarterly Report on Form 10-Q (this “Form 10-Q”) relates to the financial position and periods as of and for the three months ended March 31, 2022 ("Successor Quarter") and the three months ended March 31, 2021 (“Predecessor Quarter”). The Company's annual report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”) should be read in conjunction with this Form 10-Q. The accompanying unaudited consolidated financial statements reflect all normal recurring adjustments which, in the opinion of management, are necessary for a fair statement of our condensed consolidated financial statements and accompanying notes and include the accounts of our wholly-owned subsidiaries. Intercompany accounts and balances have been eliminated. The accompanying consolidated financial statements have been prepared assuming the Company will continue as a going concern.
Voluntary Reorganization Under Chapter 11 of the Bankruptcy Code
In connection with the Company's emergence from bankruptcy and in accordance with ASC 852, the Company qualified for and applied fresh start accounting on the Emergence date. For further information on the Company’s reorganization value and the resulting fresh start adjustments made on the Emergence Date, refer to the “Fresh Start Accounting” footnote in the notes to the consolidated financial statements in Item 8 of the Company’s 2021 Form 10-K.
Accounts Payable and Accrued Liabilities
Accounts payable and accrued liabilities consisted of the following at March 31, 2022 and December 31, 2021 (in thousands):
Successor
March 31, 2022December 31, 2021
Accounts payable and other accrued liabilities$183,786 $143,938 
Revenue payable and suspense173,285 180,857 
Accrued contract rejection damages and shares held in reserve40,996 69,216 
Total accounts payable and accrued liabilities$398,067 $394,011 
Reorganization Items, Net
In the Predecessor Quarter, the Company incurred significant expenses related to its Chapter 11 filing. The amount of these items, which were incurred in reorganization items, net within the Company's accompanying consolidated statements of
9

operations, significantly affected the Company's statements of operations. The Company also incurred adjustments for allowable claims related to its legal proceedings and executory contracts approved for rejection by the Bankruptcy Court.
The following table summarizes the components in reorganization items, net included in the Company's consolidated statements of operations for the Predecessor Quarter (in thousands):
Predecessor
Three Months Ended March 31, 2021
Legal and professional fees$40,783 
Adjustment to allowed claims2,088 
Gain on settlement of pre-petition accounts payable(4,150)
Reorganization items, net$38,721 
Other Income
Other, net included in the Company's consolidated statements of operations for the Successor Quarter included $11.5 million related to the TC claim distribution received as discussed in Note 7.
Supplemental Cash Flow and Non-Cash Information (in thousands)
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Supplemental disclosure of cash flow information:
Cash paid for reorganization items, net$ $21,367 
Interest payments$2,110 $4,763 
Changes in operating assets and liabilities:
Decrease (increase) in accounts receivable - oil and natural gas sales$25,985 $(14,117)
Increase in accounts receivable - joint interest and other(17,722)(478)
Increase in accounts payable and accrued liabilities2,135 15,555 
Decrease in prepaid expenses6,811 26,356 
Increase in other assets(17)(655)
Total changes in operating assets and liabilities$17,192 $26,661 
Supplemental disclosure of non-cash transactions:
Capitalized stock-based compensation$597 $630 
Asset retirement obligation capitalized$16 $483 
Release of common stock held in reserve$28,220 $ 
Foreign currency translation gain on equity method investments$ $2,570 
10

2.PROPERTY AND EQUIPMENT
The major categories of property and equipment and related accumulated DD&A and impairment as of March 31, 2022 and December 31, 2021 are as follows (in thousands):
Successor
March 31, 2022December 31, 2021
Proved oil and natural gas properties$2,030,289 $1,917,833 
Unproved properties203,678 211,007 
Other depreciable property and equipment5,034 4,943 
Land386 386 
Total property and equipment2,239,387 2,134,169 
Accumulated DD&A and impairment(340,709)(278,341)
Property and equipment, net$1,898,678 $1,855,828 
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. At March 31, 2022, the net book value of the Company's oil and gas properties was below the calculated ceiling for the period leading up to March 31, 2022. As a result, the Company did not record an impairment of its oil and natural gas properties for the Successor Quarter. The Company did not record impairment of its oil and natural gas properties for the Predecessor Quarter.
Certain general and administrative costs are capitalized to the full cost pool and represent management’s estimate of costs incurred directly related to exploration and development activities. All general and administrative costs not capitalized are charged to expense as they are incurred. Capitalized general and administrative costs were approximately $4.7 million and $5.5 million for the Successor Quarter and Predecessor Quarter, respectively.
The Company evaluates the costs excluded from its amortization calculation at least annually. Individually insignificant unevaluated properties are grouped for evaluation and periodically transferred to evaluated properties over a timeframe consistent with their expected development schedule.
The following table summarizes the Company’s non-producing properties excluded from amortization by area as of March 31, 2022:
Successor
March 31, 2022
(In thousands)
Utica$168,809 
SCOOP34,865 
Other4 
Total unproved properties$203,678 
11

Asset Retirement Obligation
The following table provides a reconciliation of the Company’s asset retirement obligation for the Successor and Predecessor Quarters (in thousands):
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Asset retirement obligation, beginning of period$28,264 $63,566 
Liabilities incurred16 483 
Accretion expense692 805 
Total asset retirement obligation as of end of period$28,972 $64,854 
Less: amounts reclassified to liabilities subject to compromise$ $(64,854)
Total asset retirement obligation reflected as non-current liabilities$28,972 $ 
3.DEBT
Debt consisted of the following items as of March 31, 2022 and December 31, 2021 (in thousands):
Successor
March 31, 2022December 31, 2021
Credit Facility$25,000 $164,000 
8.000% senior unsecured notes due 2026550,000 550,000 
Net unamortized debt issuance costs(1,004)(1,054)
Total debt, net573,996 712,946 
Less: current maturities of long-term debt  
Total long-term debt, net$573,996 $712,946 
Credit Facility
On October 14, 2021, the Company entered into the Third Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and various lender parties ("Credit Facility"). The Credit Facility provides for an aggregate maximum principal amount of up to $1.5 billion, an initial borrowing base of $850.0 million and an initial aggregate elected commitment amount of $700.0 million. The credit agreement also provides for a $175.0 million sublimit of the aggregate commitments that is available for the issuance of letters of credit. The Credit Facility matures October 14, 2025.
As of March 31, 2022, the Company had $25.0 million outstanding borrowings under the Credit Facility and $113.2 million in letters of credit outstanding. As of March 31, 2022, the Company was in compliance with all covenants under the Credit Facility.
The Credit Facility bears interest at a rate equal to, at the Company’s election, either (a) LIBOR plus an applicable margin that varies from 2.75% to 3.75% per annum or (b) a base rate plus an applicable margin that varies from 1.75% to 2.75% per annum, based on borrowing base utilization. The Company is required to pay a commitment fee of 0.50% per annum on the average daily unused portion of the current aggregate commitments under the Credit Facility. The Company is also required to pay customary letter of credit and fronting fees.
The borrowing base will be redetermined semiannually on or around May 1 and November 1 of each year, with the first scheduled redetermination to be on or around May 1, 2022. On May 2, 2022, the Company completed its semi-annual borrowing base redetermination as discussed in Note 13.
As of March 31, 2022, the Credit Facility bore interest at a weighted average rate of 3.21%.
12

The credit agreement requires the Company to maintain as of the last day of each fiscal quarter (i) a net funded leverage ratio of less than or equal to 3.25 to 1.00, and (ii) a current ratio of greater than or equal to 1.00 to 1.00.
The obligations under the Credit Facility, certain swap obligations and certain cash management obligations, are guaranteed by the Company and the wholly-owned domestic material subsidiaries of the Borrower (collectively, the “Guarantors” and, together with the Borrower, the “Loan Parties”) and secured by substantially all of the Loan Parties’ assets (subject to customary exceptions).
The credit agreement also contains customary affirmative and negative covenants, including, among other things, as to compliance with laws (including environmental laws and anti-corruption laws), delivery of quarterly and annual financial statements and borrowing base certificates, conduct of business, maintenance of property, maintenance of insurance, entry into certain derivatives contracts, restrictions on the incurrence of liens, indebtedness, asset dispositions, restricted payments, and other customary covenants. These covenants are subject to a number of limitations and exceptions.
2026 Senior Notes
On the Emergence Date, pursuant to the terms of the Plan, the Company issued $550 million aggregate principal amount of its 8.000% senior notes due 2026. The notes are guaranteed on a senior unsecured basis by each of the Company's subsidiaries that guarantee the Credit Facility. Interest on the 2026 Senior Notes is payable semi-annually, on June 1 and December 1 of each year. The 2026 Senior Notes were issued under the Indentures, dated as of May 17, 2021, by and among the Issuer, UMB Bank, National Association, as trustee, and the Guarantors and mature on May 17, 2026.
The covenants of the 1145 Indenture (other than the payment covenant) require that the Company comply with the covenants of the 4(a)(2) Indenture, as amended. The 4(a)(2) Indenture contains covenants limiting the Issuer’s and its restricted subsidiaries’ ability to (i) incur additional debt, (ii) pay dividends or distributions in respect of certain equity interests or redeem, repurchase or retire certain equity interests or subordinated indebtedness, (iii) make certain investments, (iv) create restrictions on distributions from restricted subsidiaries, (v) engage in specified sales of assets, (vi) enter into certain transactions among affiliates, (vii) engage in certain lines of business, (viii) engage in consolidations, mergers and acquisitions, (ix) create unrestricted subsidiaries and (x) incur or create liens. These covenants contain important exceptions, limitations and qualifications. At any time that the 2026 Senior Notes are rated investment grade, certain covenants will be terminated and cease to apply.
Capitalization of Interest
The Company did not capitalize interest expense for the Successor Quarter or Predecessor Quarter.
Fair Value of Debt
At March 31, 2022, the carrying value of the outstanding debt represented by the 2026 Senior Notes was $549.0 million. Based on the quoted market prices (Level 1), the fair value of the 2026 Senior Notes was determined to be $570.1 million at March 31, 2022.
4.EQUITY AND MEZZANINE EQUITY
On the Emergence Date, the Company filed an amended and restated certificate of incorporation with the Delaware Secretary of State to provide for, among other things, (i) the authority to issue 42 million shares of common stock with a par value of $0.0001 per share and (ii) the designation of 110,000 shares of preferred stock, with a par value of $0.0001 per share and a liquidation preference of $1,000 per share.
Equity
Common Stock
On the Emergence Date, all existing shares of the Predecessor's common stock were cancelled. The Successor issued approximately 19.8 million shares of common stock and 1.7 million shares of common stock were issued to the Disputed Claims reserve.
13

In January 2022, approximately 876,000 shares in the Disputed Claims reserve at December 31, 2021 were issued to certain claimants. As of March 31, 2022, approximately 62,000 shares continue to be held in the Disputed Claims reserve and may be issued upon finalization of remaining claims.
Share Repurchase Program
On November 1, 2021, the Company's Board of Directors approved a stock repurchase program to acquire up to $100.0 million of its common stock ("Repurchase Program"). Purchases under the Repurchase Program may be made from time to time in open market or privately negotiated transactions, and will be subject to available liquidity, market conditions, credit agreement restrictions, applicable legal requirements, contractual obligations and other factors. The Repurchase Program does not require the Company to acquire any specific number of shares of common stock. The Company intends to purchase shares under the Repurchase Program opportunistically with available funds while maintaining sufficient liquidity to fund its capital development program. The Repurchase Program is authorized to extend through December 31, 2022, and may be suspended from time to time, modified, extended or discontinued by the board of directors at any time. Any shares of common stock repurchased are expected to be cancelled. As of March 31, 2022, 438,082 shares have been repurchased for approximately $35.5 million under the Repurchase Program at a weighted average price of $81.06 per share.
Mezzanine Equity
Preferred Stock
On the Emergence Date, the Successor issued 55,000 shares of preferred stock.
Holders of preferred stock are entitled to receive cumulative quarterly dividends at a rate of 10% per annum of the Liquidation Preference (as defined below) with respect to cash dividends and 15% per annum of the Liquidation Preference with respect to dividends paid in kind as additional shares of preferred stock (“PIK Dividends”). Gulfport currently has the option to pay either cash or PIK dividends on a quarterly basis.
Each holder of shares of preferred stock has the right (the “Conversion Right”), at its option and at any time, to convert all or a portion of the shares of preferred stock that it holds into a number of shares of common stock equal to the quotient obtained by dividing (x) the product obtained by multiplying (i) the Liquidation Preference times (ii) an amount equal to one (1) plus the Per Share Makewhole Amount (as defined in the Preferred Terms) on the date of conversion, by (y) $14.00 per share (as may be adjusted under the Preferred Terms) (the “Conversion Price”). The shares of preferred stock outstanding at March 31, 2022 would convert to approximately 4.1 million shares of common stock if all holders of preferred stock exercised their Conversion Right.
Gulfport shall have the right, but not the obligation, to redeem all, but not less than all, of the outstanding shares of preferred stock by notice to the holders of preferred stock, at the greater of (i) the aggregate value of the preferred stock, calculated by the Current Market Price (as defined in the Preferred Terms) of the number of shares of common stock into which, subject to redemption, such preferred stock would have been converted if such shares were converted pursuant to the Conversion Right at the time of such redemption and (ii) (y) if the date of such redemption is on or prior to the three year anniversary of the Emergence Date, the sum of the Liquidation Preference plus the sum of all unpaid PIK Dividends through the three year anniversary of the Emergence Date, or (x) if the date of such redemption is after the three year anniversary of the Emergence Date, the Liquidation Preference (the “Redemption Price”).
Following the Emergence Date, if there is a Fundamental Change (as defined in the Preferred Terms), Gulfport is required to redeem all, but not less than all, of the outstanding shares of preferred stock by cash payment of the Redemption Price per share of preferred stock within three (3) business days of the occurrence of such Fundamental Change. Notwithstanding the foregoing, in the event of a redemption pursuant to the preceding sentence, if Gulfport lacks sufficient cash to redeem all outstanding shares of preferred stock, the Company is required to redeem a pro rata portion of each holder’s shares of preferred stock.
The preferred stock has no stated maturity and will remain outstanding indefinitely unless repurchased or redeemed by Gulfport or converted into common stock. Each share of preferred stock has a liquidation preference of $1,000 (the "Liquidation Preference").
14

The preferred stock has been classified as mezzanine equity in the accompanying consolidated balance sheets due to the redemption features noted above.
Dividends and Conversions
During the Successor Quarter, the company paid $1.5 million of cash dividends to holders of our preferred stock.
The following table summarizes activity of the Company’s preferred stock for the Successor Quarter:
Preferred stock at December 31, 202157,896 
Conversion of preferred stock(18)
Preferred stock at March 31, 202257,878 
5.STOCK-BASED COMPENSATION
On the Emergence Date, the Company's Predecessor common stock was cancelled and the Company's Successor common stock was issued. Accordingly, the Company's then existing stock-based compensation awards were also cancelled. Stock-based compensation for the Predecessor and Successor periods are not comparable.
Successor Stock-Based Compensation
As of the Emergence Date, the board of directors adopted the Incentive Plan with a share reserve equal to 2.8 million shares of common stock. The Incentive Plan provides for the grant of incentive stock options, nonstatutory stock options, restricted stock, restricted stock units, stock appreciation rights, dividend equivalents and performance awards or any combination of the foregoing. The Company has granted both restricted stock units and performance vesting restricted stock units to employees and directors pursuant to the Incentive Plan, as discussed below. During the Successor Quarter, the Company's stock-based compensation expense was $1.8 million, of which the Company capitalized $0.6 million relating to its exploration and development efforts. Stock compensation expense, net of the amounts capitalized, is included in general and administrative expenses in the accompanying consolidated statements of operations. As of March 31, 2022, the Company has awarded an aggregate of approximately 196,000 restricted stock units and approximately 153,000 performance vesting restricted stock units under the Incentive Plan.
The following table summarizes restricted stock unit activity for the Successor Quarter:
Number of
Unvested
Restricted Stock Units
Weighted
Average
Grant Date
Fair Value
Number of
Unvested
Performance Vesting Restricted Stock Units
Weighted
Average
Grant Date
Fair Value
Unvested shares as of January 1, 2022198,413 $66.04 153,138 $48.54 
Granted2,154 73.83   
Vested(3,074)65.75   
Forfeited/canceled(1,157)66.89   
Unvested shares as of March 31, 2022196,336 $67.16 153,138 $48.54 
Successor Restricted Stock Units
Restricted stock units awarded under the Incentive Plan generally vest over a period of 1 to 4 years in the case of employees and 4 years in the case of directors upon the recipient meeting applicable service requirements. Stock-based compensation expense is recorded ratably over the service period. The grant date fair value of restricted stock units represents the closing market price of the Company's common stock on the date of the grant. Unrecognized compensation expense as of March 31, 2022 was $10.0 million. The expense is expected to be recognized over a weighted average period of 2.63 years.
15

Successor Performance Vesting Restricted Stock Units
The Company has awarded performance vesting restricted stock units to certain of its executive officers under the Incentive Plan. The number of shares of common stock issued pursuant to the award will be based on a combination of (i) the Company's total shareholder return ("TSR") and (ii) the Company's relative total shareholder return ("RTSR") for the performance period. Participants will earn from 0% to 200% of the target award based on the Company's TSR and RTSR ranking compared to the TSR of the companies in the Company's designated peer group at the end of the performance period. Awards will be earned and vested over a performance period from May 17, 2021 to May 17, 2024, subject to earlier termination of the performance period in the event of a change in control. The grant date fair values were determined using the Monte Carlo simulation method and are being recorded ratably over the performance period. Unrecognized compensation expense as of March 31, 2022, related to performance vesting restricted shares was $5.7 million. The expense is expected to be recognized over a weighted average period of 2.13 years.
Predecessor Stock-Based Compensation
The Predecessor granted restricted stock units to employees and directors pursuant to the 2019 Plan. During the Predecessor Quarter, the Company’s stock-based compensation cost was $3.0 million, of which the Company capitalized $0.6 million, relating to its exploration and development efforts. Stock compensation costs, net of the amounts capitalized, are included in general and administrative expenses in the accompanying consolidated statements of operations.
The following table summarizes restricted stock unit activity for the Predecessor Quarter:
Number of
Unvested
Restricted Stock Units
Weighted
Average
Grant Date
Fair Value
Number of
Unvested
Performance Vesting Restricted Stock Units
Weighted
Average
Grant Date
Fair Value
Unvested shares as of January 1, 20211,702,513 $4.74 840,595 $4.07 
Granted    
Vested(202,583)8.32   
Forfeited/canceled(19,707)3.61   
Unvested shares as of March 31, 20211,480,223 $4.26 840,595 $4.07 
Predecessor Restricted Stock Units
Restricted stock units awarded under the 2019 Plan generally vested over a period of one year in the case of directors and three years in the case of employees and vesting was dependent upon the recipient meeting applicable service requirements. Stock-based compensation costs are recorded ratably over the service period. The grant date fair value of restricted stock units represents the closing market price of the Company's common stock on the date of grant. All unrecognized compensation expense was recognized as of the Emergence Date.
Predecessor Performance Vesting Restricted Stock Units
The Company previously awarded performance vesting restricted stock units to certain of its executive officers under the 2019 Plan. The number of shares of common stock issued pursuant to the award was based on RTSR. RTSR is an incentive measure whereby participants will earn from 0% to 200% of the target award based on the Company’s TSR ranking compared to the TSR of the companies in the Company’s designated peer group at the end of the performance period. Awards were to be earned and vested over a performance period measured from January 1, 2019 to December 31, 2021, subject to earlier termination of the performance period in the event of a change in control. All unrecognized compensation expense was recognized as of the Emergence Date.
6.EARNINGS PER SHARE
Basic income or loss per share attributable to common stockholders is computed as (i) net income or loss less (ii) dividends paid to holders of preferred stock less (iii) net income or loss attributable to participating securities divided by (iv) weighted average basic shares outstanding. Diluted net income or loss per share attributable to common stockholders is computed as (i)
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basic net income or loss attributable to common stockholders plus (ii) diluted adjustments to income allocable to participating securities divided by (iii) weighted average diluted shares outstanding. The "if-converted" method is used to determine the dilutive impact for the Company's convertible preferred stock and the treasury stock method is used to determine the dilutive impact of unvested restricted stock.
There were no potential shares of common stock that were considered dilutive for the Successor Quarter or Predecessor Quarter. There were 4.1 million shares of potential common shares issuable due to the Company's convertible preferred stock and 0.1 million shares of restricted stock that were considered anti-dilutive during the Successor Quarter.
Reconciliations of the components of basic and diluted net (loss) income per common share are presented in the table below (in thousands):
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Net (loss) income$(491,975)$8,780 
Dividends on preferred stock(1,447) 
Participating securities - preferred stock(1)
  
Net (loss) income attributable to common stockholders$(493,422)$8,780 
Basic Shares21,242 160,813 
Basic and Dilutive EPS$(23.23)$0.05 
_____________________
(1)    Preferred stock represents participating securities because it participates in any dividends on shares of common stock on a pari passu, pro rata basis. However, preferred stock does not participate in undistributed net losses.
7.COMMITMENTS AND CONTINGENCIES
Commitments
Future Firm Transportation and Gathering Agreements
    The Company has contractual commitments with midstream and pipeline companies for future gathering and transportation of natural gas from the Company's producing wells to downstream markets. Under certain of these agreements, the Company has minimum daily volume commitments. The Company is also obligated under certain of these arrangements to pay a demand charge for firm capacity rights on pipeline systems regardless of the amount of pipeline capacity utilized by the Company. If the Company does not utilize the capacity, it often can release it to other counterparties, thus reducing the cost of these commitments. Working interest owners and royalty interest owners, where appropriate, will be responsible for their proportionate share of these costs. Commitments related to future firm transportation and gathering agreements are not recorded as obligations in the accompanying consolidated balance sheets; however, costs associated with utilized future firm transportation and gathering agreements are reflected in the Company's estimates of proved reserves.
A summary of these commitments at March 31, 2022 are set forth in the table below, excluding contracts in the process of being rejected as discussed in the Litigation and Regulatory Proceedings section below (in thousands):
Remaining 2022$180,807 
2023229,733 
2024220,708 
2025139,706 
2026136,235 
Thereafter889,674 
Total$1,796,863 
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Contingencies
The Company is involved in a number of litigation and regulatory proceedings including those described below. Many of these proceedings are in early stages, and many of them seek or may seek damages and penalties, the amount of which is indeterminate. The Company's total accrued liabilities in respect of litigation and regulatory proceedings is determined on a case-by-case basis and represents an estimate of probable losses after considering, among other factors, the progress of each case or proceeding, its experience and the experience of others in similar cases or proceedings, and the opinions and views of legal counsel. Significant judgment is required in making these estimates and their final liabilities may ultimately be materially different. In accordance with ASC Topic 450, Contingencies, an accrual is recorded for a material loss contingency when its occurrence is probable and damages are reasonably estimable based on the anticipated most likely outcome or the minimum amount within a range of possible outcomes.
Litigation and Regulatory Proceedings
Commencement of the Chapter 11 Cases automatically stayed the proceedings and actions against us that are described below, in addition to actions seeking to collect pre-petition indebtedness or to exercise control over the property of the Company's bankruptcy estates. The Plan in the Chapter 11 Cases, which became effective on May 17, 2021, provided for the treatment of claims against the Company's bankruptcy estates, including pre-petition liabilities that had not been satisfied or addressed during the Chapter 11 Cases.
As part of its Chapter 11 Cases and restructuring efforts, the Company filed motions to reject certain firm transportation agreements between the Company and affiliates of TC Energy Corporation ("TC") and Rover Pipeline LLC ("Rover") (jointly, the “Pending Motions to Reject”). The Pending Motions to Reject were removed to the United States District Court for the Southern District of Texas. While the Pending Motions to Reject are litigated, the Company isn’t required to perform under these firm transportation agreements. During the third quarter of 2021, Gulfport finalized a settlement agreement with TC that was approved by the Bankruptcy Court on September 21, 2021. Pursuant to the settlement agreement, Gulfport and TC agreed that the firm transportation contracts between Gulfport and TC would be rejected without any further payment or obligation by Gulfport or TC, and TC assigned its damages claims from such rejection to Gulfport. In exchange, Gulfport agreed to make a payment of $43.8 million in cash to TC. The $43.8 million was paid to TC on October 7, 2021. Gulfport expects to receive distributions for a significant portion of such amounts through future distributions with respect to the assigned claims pursuant to Gulfport’s Chapter 11 plan of reorganization that became effective in May 2021. Any future distributions will be recognized once received by Gulfport. In February 2022, Gulfport received an initial distribution of $11.5 million from the above mentioned claim, which is included in Other, net in the accompanying consolidated statements of operations. The timing and amount of any future distributions are not certain, and the total amount received will be impacted by the bankruptcy trustee's liquidation of Mammoth Energy shares and other bankruptcy claims. The Company believes that the Pending Motion to Reject with respect to Rover will be ultimately granted, and that the Company does not have any ongoing obligation pursuant to the contract; however, in the event that the Company is not permitted to reject the Rover firm transportation contract, it could be liable for demand charges, attorneys' fees and interest in excess of approximately $64 million.
In March 2020, Robert F. Woodley, individually and on behalf of all others similarly situated, filed a federal securities class action against the Company, David M. Wood, Keri Crowell and Quentin R. Hicks in the United States District Court for the Southern District of New York. The complaint alleges that the Company made materially false and misleading statements regarding the Company’s business and operations in violation of the federal securities laws and seeks unspecified damages, the payment of reasonable attorneys’ fees, expert fees and other costs, pre-judgment and post-judgment interest, and such other and further relief that may be deemed just and proper. On January 11, 2022, the court granted Gulfport's motion to dismiss and the case was closed by the court on February 14, 2022. The plaintiffs appealed the district court ruling on March 10, 2022.
The Company, along with other oil and gas companies, have been named as a defendant in J&R Passmore, LLC, individually and on behalf of all others similarly situated, in the United States District Court for the Southern District of Ohio on December 6, 2018. Plaintiffs assert their respective leases are limited to the Marcellus and Utica shale geological formations and allege that Defendants have willfully trespassed and illegally produced oil, natural gas, and other hydrocarbon products beyond these respective formations. Plaintiffs seek the full value of any production from below the Marcellus and Utica shale formations, unspecified damages from the diminution of value to their mineral estate, unspecified punitive damages, and the payment of reasonable attorney fees, legal expenses, and interest. On April 27, 2021, the Bankruptcy Court for the Southern District of Texas approved a settlement agreement in which the plaintiffs fully released the Company from all claims for amounts allegedly owed to the plaintiffs through the effective date of the Company’s Chapter 11 plan, which occurred on May 17, 2021. The plaintiffs are continuing to pursue alleged damages after May 17, 2021.
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Business Operations
The Company is involved in various lawsuits and disputes incidental to its business operations, including commercial disputes, personal injury claims, royalty claims, property damage claims and contract actions.
Environmental Contingencies
The nature of the oil and gas business carries with it certain environmental risks for Gulfport and its subsidiaries. Gulfport and its subsidiaries have implemented various policies, programs, procedures, training and audits to reduce and mitigate environmental risks. The Company conducts periodic reviews, on a company-wide basis, to assess changes in their environmental risk profile. Environmental reserves are established for environmental liabilities for which economic losses are probable and reasonably estimable. The Company manages its exposure to environmental liabilities in acquisitions by using an evaluation process that seeks to identify pre-existing contamination or compliance concerns and address the potential liability. Depending on the extent of an identified environmental concern, they may, among other things, exclude a property from the transaction, require the seller to remediate the property to their satisfaction in an acquisition or agree to assume liability for the remediation of the property.
Other Matters
Based on management’s current assessment, they are of the opinion that no pending or threatened lawsuit or dispute relating to its business operations is likely to have a material adverse effect on their future consolidated financial position, results of operations or cash flows. The final resolution of such matters could exceed amounts accrued, however, and actual results could differ materially from management’s estimates.
8.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, 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 50% to 75% of its forecasted 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 24 months. Gulfport does not enter into commodity derivative contracts for speculative purposes.
Fixed price swaps 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 prices contained in these fixed price swaps are based on the NYMEX Henry Hub for natural gas, the NYMEX WTI for oil and Mont Belvieu for propane.
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.
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Below is a summary of the Company’s open fixed price swap positions as of March 31, 2022. 
IndexDaily VolumeWeighted
Average Price
Natural Gas(MMBtu/d)($/MMBtu)
Remaining 2022NYMEX Henry Hub190,145 $2.90 
2023NYMEX Henry Hub155,014 $3.54 
2024NYMEX Henry Hub24,973 $3.62 
Oil(Bbl/d)($/Bbl)
Remaining 2022NYMEX WTI2,335 $66.17 
2023NYMEX WTI2,000 $67.89 
NGL(Bbl/d)($/Bbl)
Remaining 2022Mont Belvieu C33,502 $35.62 
2023Mont Belvieu C32,000 $35.05 
The Company entered into costless collars based off the NYMEX WTI and Henry Hub oil and natural gas indices. Each two-way price collar has a set floor and ceiling price for the hedged production. If the applicable monthly price indices are outside of the ranges set by the floor and ceiling prices in the various collars, the Company will cash-settle the difference with the hedge counterparty. Below is a summary of the Company's costless collar positions as of March 31, 2022.
IndexDaily VolumeWeighted Average Floor PriceWeighted Average Ceiling Price
Natural Gas(MMBtu/d)($/MMBtu)($/MMBtu)
Remaining 2022NYMEX Henry Hub431,391 $2.56 $3.07 
2023NYMEX Henry Hub85,000 $2.75 $4.25 
Oil(Bbl/d)($/Bbl)($/Bbl)
Remaining 2022NYMEX WTI1,500 $55.00 $60.00 
In the third quarter of 2019, the Company sold call options in exchange for a premium, and used the associated premiums received to enhance the fixed price for a portion of the fixed price natural gas swaps primarily for 2020. Each short call option has an established ceiling price. When the referenced settlement price is above the price ceiling established by these short call options, the Company pays its counterparty an amount equal to the difference between the referenced settlement price and the price ceiling multiplied by the hedged contract volumes. No payment is due from either party if the referenced settlement price is below the price ceiling. Below is a summary of the Company's open sold call option positions as of March 31, 2022.
IndexDaily VolumeWeighted Average Price
Natural Gas(MMBtu/d)($/MMBtu)
Remaining 2022NYMEX Henry Hub152,675 $2.90 
2023NYMEX Henry Hub507,925 $2.90 
2024NYMEX Henry Hub162,000 $3.00 
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In addition, the Company entered into natural gas basis swap positions. As of March 31, 2022, the Company had the following natural gas swap positions open:
Gulfport PaysGulfport ReceivesDaily VolumeWeighted Average Fixed Spread
Natural Gas(MMBtu/d)($/MMBtu)
2023Rex Zone 3NYMEX Plus Fixed Spread20,000 $(0.21)
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 March 31, 2022 and December 31, 2021 (in thousands):
Successor
March 31, 2022December 31, 2021
Short-term derivative asset$15,720 $4,695 
Long-term derivative asset20,696 18,664 
Short-term derivative liability(820,255)(240,735)
Long-term derivative liability(281,622)(184,580)
Total commodity derivative position$(1,065,461)$(401,956)
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Gains and Losses
The following table presents the gain and loss recognized in net loss on natural gas, oil and NGL derivatives in the accompanying consolidated statements of operations for the Successor Quarter and Predecessor Quarter (in thousands):
Net loss on derivative instruments
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Natural gas derivatives - fair value losses$(619,319)$(25,538)
Natural gas derivatives - settlement (losses) gains(111,157)125 
Total losses on natural gas derivatives(730,476)(25,413)
Oil derivatives - fair value losses(29,853)(1,731)
Oil derivatives - settlement losses(8,144) 
Total losses on oil derivatives(37,997)(1,731)
NGL derivatives - fair value losses(14,333)(2,834)
NGL derivatives - settlement losses(5,745) 
Total losses on NGL derivatives(20,078)(2,834)
Total losses on natural gas, oil and NGL derivatives$(788,551)$(29,978)
Offsetting of Derivative Assets and Liabilities
As noted above, the Company records the fair value of derivative instruments on a gross basis. The following tables present 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):
Successor
As of March 31, 2022
Gross Assets (Liabilities)Gross Amounts
Presented in theSubject to MasterNet
Consolidated Balance SheetsNetting AgreementsAmount
Derivative assets$36,416 $(36,416)$ 
Derivative liabilities$(1,101,877)$36,416 $(1,065,461)
Successor
As of December 31, 2021
Gross Assets (Liabilities)Gross Amounts
Presented in theSubject to MasterNet
Consolidated Balance SheetsNetting AgreementsAmount
Derivative assets$23,359 $(20,265)$3,094 
Derivative liabilities$(425,315)$20,265 $(405,050)
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
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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.
9.FAIR VALUE MEASUREMENTS
The Company records certain financial and non-financial assets and liabilities on the balance sheet at fair value. Fair value is the price that would be received to sell an asset or paid to transfer a liability (exit price) in an orderly transaction between market participants at the measurement date. Market or observable inputs are the preferred sources of values, followed by assumptions based on hypothetical transactions in the absence of market inputs. Fair value measurements are classified and disclosed in one of the following categories:
Level 1 – Quoted prices (unadjusted) in active markets for identical assets and liabilities that the Company has the ability to access at the measurement date.
Level 2 – Quoted prices in active markets for similar assets and liabilities, quoted prices for identical or similar instruments in markets that are not active and model-derived valuations whose inputs are observable or whose significant value drivers are observable.
Level 3 – Significant inputs to the valuation model are unobservable.
Valuation techniques that maximize the use of observable inputs are favored. Financial assets and liabilities are classified in their entirety based on the lowest level of input that is significant to the fair value measurement. The assessment of the significance of a particular input to the fair value measurement requires judgment and may affect the placement of assets and liabilities within the levels of the fair value hierarchy. Reclassifications of fair value between Level 1, Level 2 and Level 3 of the fair value hierarchy, if applicable, are made at the end of each quarter.
Financial assets and liabilities
The following tables summarize the Company’s financial and non-financial assets and liabilities by valuation level as of March 31, 2022 and December 31, 2021 (in thousands):
Successor
 March 31, 2022
Level 1Level 2Level 3
Assets:
Derivative instruments$ $36,416 $ 
Contingent consideration arrangement  5,300 
Total assets$ $36,416 $5,300 
Liabilities:
Derivative instruments $ $1,101,877 $ 
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Successor
 December 31, 2021
Level 1Level 2Level 3
Assets:
Derivative instruments$ $23,359 $ 
Contingent consideration arrangement  5,800 
Total assets$ $23,359 $5,800 
Liabilities:
Derivative instruments $ $425,315 $ 
The Company estimates the fair value of all derivative instruments using industry-standard models that consider various assumptions, including current market and contractual prices for the underlying instruments, implied volatility, time value, nonperformance risk, as well as other relevant economic measures. Substantially all of these inputs are observable in the marketplace throughout the full term of the instrument and can be supported by observable data. The Company adjusted the fair value of its derivative instruments as a fresh start adjustment at the Emergence Date as a result of changes in the Company's credit adjustment to reflect its new credit standing at emergence.
The Company's SCOOP water infrastructure sale, which closed in the first quarter of 2020, included a contingent consideration arrangement. As of March 31, 2022, the fair value of the contingent consideration was $5.3 million, of which $0.8 million is included in prepaid expenses and other assets and $4.5 million is included in other assets in the accompanying consolidated balance sheets. The fair value of the contingent consideration arrangement is calculated using discounted cash flow techniques and is based on internal estimates of the Company's future development program and water production levels. Given the unobservable nature of the inputs, the fair value measurement of the contingent consideration arrangement is deemed to use Level 3 inputs. The Company has elected the fair value option for this contingent consideration arrangement and, therefore, records changes in fair value in earnings. The Company recognized a $0.1 million loss for the Successor Quarter and a nominal gain for the Predecessor Quarter, which are included in other expense (income) in the accompanying consolidated statements of operations.
Non-financial assets and liabilities
The initial measurement of asset retirement obligations at fair value is calculated using discounted cash flow techniques and based on internal estimates of future retirement costs associated with oil and gas properties. Given the unobservable nature of the inputs, including plugging costs and reserve lives, the initial measurement of the asset retirement obligation liability is deemed to use Level 3 inputs. See Note 2 for further discussion of the Company’s asset retirement obligations.
Fair value of other financial instruments
The carrying amounts on the accompanying consolidated balance sheet for cash and cash equivalents, accounts receivable, and accounts payable and accrued liabilities are carried at cost, which approximates market value due to their short-term nature. Long-term debt related to the Company's Credit Facility is carried at cost, which approximates market value based on the borrowing rates currently available to the Company with similar terms and maturities.
10.REVENUE FROM CONTRACTS WITH CUSTOMERS
Revenue Recognition
The Company’s revenues are primarily derived from the sale of natural gas, oil and condensate and NGL. Sales of natural gas, oil and condensate and NGL are recognized in the period that the performance obligations are satisfied. The Company generally considers the delivery of each unit (MMBtu or Bbl) to be separately identifiable and represents a distinct performance obligation that is satisfied at the time control of the product is transferred to the customer. Revenue is measured based on consideration specified in the contract with the customer, and excludes any amounts collected on behalf of third parties. These contracts typically include variable consideration that is based on pricing tied to market indices and volumes delivered in the current month. As such, this market pricing may be constrained (i.e., not estimable) at the inception of the contract but will be recognized based on the applicable market pricing, which will be known upon transfer of the goods to the customer. The payment date is usually within 30 days of the end of the calendar month in which the commodity is delivered.
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Gathering, processing and compression fees attributable to gas processing, as well as any transportation fees, including firm transportation fees, incurred to deliver the product to the purchaser, are presented as transportation, gathering, processing and compression expense in the accompanying consolidated statements of operations.
Transaction Price Allocated to Remaining Performance Obligations
A significant number of the Company's product sales are short-term in nature generally through evergreen contracts with contract terms of one year or less. These contracts typically automatically renew under the same provisions. For those contracts, the Company has utilized the practical expedient allowed in the new revenue accounting standard that exempts the Company from disclosure of the transaction price allocated to remaining performance obligations if the performance obligation is part of a contract that has an original expected duration of one year or less.
For product sales that have a contract term greater than one year, the Company has utilized the practical expedient that exempts the Company from disclosure of the transaction price allocated to remaining performance obligations if the variable consideration is allocated entirely to a wholly unsatisfied performance obligation. Under these sales contracts, each unit of product generally represents a separate performance obligation; therefore, future volumes are wholly unsatisfied and disclosure of the transaction price allocated to remaining performance obligations is not required. Currently, the Company's product sales that have a contractual term greater than one year have no long-term fixed consideration.
Contract Balances
Receivables from contracts with customers are recorded when the right to consideration becomes unconditional, generally when control of the product has been transferred to the customer. Receivables from contracts with customers were $206.9 million and $232.9 million as of March 31, 2022 and December 31, 2021, respectively, and are reported in accounts receivable - oil and natural gas sales on the consolidated balance sheets. The Company currently has no assets or liabilities related to its revenue contracts, including no upfront or rights to deficiency payments.
Prior-Period Performance Obligations
The Company records revenue in the month production is delivered to the purchaser. However, settlement statements for certain sales may be received for 30 to 90 days after the date production is delivered, and as a result, the Company is required to estimate the amount of production that was delivered to the purchaser and the price that will be received for the sale of the product. The differences between the estimates and the actual amounts for product sales is recorded in the month that payment is received from the purchaser. For the Predecessor Quarter and Successor Quarter, revenue recognized in the reporting periods related to performance obligations satisfied in prior reporting periods was not material.
11.LEASES
Nature of Leases
The Company has operating leases on certain equipment with remaining lease durations in excess of one year. The Company recognizes a right-of-use asset and lease liability on the balance sheet for all leases with lease terms of greater than one year. Short-term leases that have an initial term of one year or less are not capitalized.
The Company has entered into contracts for drilling rigs with varying terms with third parties to ensure operational continuity, cost control and rig availability in its operations. The Company has concluded its drilling rig contracts are operating leases as the assets are identifiable and the Company has the right to control the identified assets. However, at March 31, 2022, the Company did not have any active long-term drilling rig contracts in place.
The Company rents office space for its corporate headquarters, field locations and certain other equipment from third parties, which expire at various dates through 2023. These agreements are typically structured with non-cancelable terms of one to five years. The Company has determined these agreements represent operating leases with a lease term that equals the primary non-cancelable contract term. The Company has included any renewal options that it has determined are reasonably certain of exercise in the determination of the lease terms. The lease for the Company's corporate headquarters has a primary term of one year and is classified as a short-term operating lease.
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Discount Rate
As most of the Company's leases do not provide an implicit rate, the Company uses its incremental borrowing rate based on the information available at commencement date in determining the present value of lease payments. The Company's incremental borrowing rate reflects the estimated rate of interest that it would pay to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.
Future amounts due under operating lease liabilities as of March 31, 2022 were as follows (in thousands):
Remaining 2022$137 
2023142 
Total lease payments$279 
Less: Imputed interest(6)
Total$273 
Lease costs incurred for the Successor Quarter and Predecessor Quarter consisted of the following (in thousands):
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Operating lease cost$50 $32 
Variable lease cost  
Short-term lease cost8,622 2,189 
Total lease cost(1)
$8,672 $2,221 
_____________________
(1)    The majority of the Company's total lease cost was capitalized to the full cost pool, and the remainder was included in either lease operating expenses or general and administrative expenses in the accompanying consolidated statements of operations.
Supplemental cash flow information related to leases was as follows (in thousands):
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Cash paid for amounts included in the measurement of lease liabilities
Operating cash flows from operating leases$49 $31 
The weighted-average remaining lease term as of March 31, 2022 was 1.56 years. The weighted-average discount rate used to determine the operating lease liability as of March 31, 2022 was 2.38%.
12.INCOME TAXES
The Company records its quarterly tax provision based on an estimate of the annual effective tax rate expected to apply to continuing operations for the various jurisdictions in which it operates. The tax effects of certain items, such as tax rate changes, significant unusual or infrequent items, and certain changes in the assessment of the realizability of deferred taxes, are recognized as discrete items in the period in which they occur and are excluded from the estimated annual effective tax rate.

For the three months ended March 31, 2022, the Company's effective tax rate was 0%, which differs from the statutory rate of 21% primarily as a result of the valuation allowance on the Company's deferred tax assets.

At each reporting period, the Company weighs all available positive and negative evidence to determine whether its deferred tax assets are more likely than not to be realized. A valuation allowance for deferred tax assets, including net operating losses, is recognized when it is more likely than not that some or all of the benefit from the deferred tax assets will not be
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realized. To assess that likelihood, the Company uses estimates and judgment regarding future taxable income and considers the tax laws in the jurisdiction where such taxable income is generated, to determine whether a valuation allowance is required. Such evidence can include current financial position, results of operations, both actual and forecasted, the reversal of deferred tax liabilities and tax planning strategies as well as the current and forecasted business economics of the oil and gas industry. Based upon the Company’s analysis, the Company determined a full valuation allowance was necessary against its net deferred tax assets as of March 31, 2022.

The Company will continue to evaluate whether the valuation allowance is needed in future reporting periods. The valuation allowance will remain until it is determined that the net deferred tax assets are more likely than not to be realized. Future events or new evidence which may lead us to conclude that it is more likely than not that its net deferred tax assets will be realized include, but are not limited to, cumulative historical pre-tax earnings, improvements in oil prices, and taxable events that could result from one or more transactions. The valuation allowance does not prevent future utilization of the tax attributes if the Company recognizes taxable income. As long as the Company concludes that the valuation allowance against its net deferred tax assets is necessary, the Company likely will not have any additional deferred income tax expense or benefit.

Elements of the Plan provided that the Company’s indebtedness related to Predecessor Senior Notes and certain general unsecured claims were exchanged for common stock in settlement of those claims. Absent an exception, a debtor recognizes CODI upon discharge of its outstanding indebtedness for an amount of consideration that is less than its adjusted issue price. The IRC provides that a debtor in a Chapter 11 bankruptcy case may exclude CODI from taxable income, but must reduce certain of its tax attributes by the amount of any CODI realized as a result of the consummation of a plan of reorganization. The amount of CODI realized by a taxpayer is determined based on the fair market value of the consideration received by the creditors in settlement of outstanding indebtedness. As a result of the market value of equity upon emergence from Chapter 11 bankruptcy proceedings, the estimated amount of CODI and reduction in historical interest expense is approximately $661 million, which will reduce the value of the Company’s net operating losses. The actual reduction in tax attributes does not occur until the first day of the Company’s tax year subsequent to the date of emergence, or January 1, 2022. The reduction of net operating losses is expected to be fully offset by a corresponding decrease in valuation allowance.

Emergence from Chapter 11 bankruptcy proceedings resulted in a change in ownership for purposes of IRC Section 382. The Company currently expects to apply rules under IRC Section 382(l)(5) that would allow the Company to mitigate the limitations imposed under the regulations with respect to the Company’s remaining tax attributes. The Company’s deferred tax assets and liabilities, prior to the valuation allowance, have been computed on such basis. Taxpayers who qualify for this provision may, at their option, elect not to apply the election. If the provision does not apply, the Company’s ability to realize the value of its tax attributes would be subject to limitation and the amount of deferred tax assets and liabilities, prior to the valuation allowance, may differ. Additionally, under IRC Section 382(l)(5), an ownership change subsequent to the Company’s emergence could severely limit or effectively eliminate its ability to realize the value of its tax attributes.
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13.SUBSEQUENT EVENTS
Natural Gas, Oil and NGL Derivative Instruments
The Company entered into additional natural gas, oil and NGL derivative contracts subsequent to March 31, 2022, which included restructuring a portion of the Company's 2023 sold call options. The Company entered into the following natural gas, oil and NGL derivative contracts subsequent to March 31, 2022 as of April 29, 2022:
Type of Derivative InstrumentIndexDaily VolumeWeighted
Average Price
Natural Gas(MMBtu/d)($/MMBtu)
January 2023 - December 2023Fixed price swapNYMEX Henry Hub10,000 $5.17
January 2023 - December 2023Costless collarNYMEX Henry Hub200,000 
$3.00 / $5.00
January 2023 - December 2023Call optionNYMEX Henry Hub(100,000)$2.90
January 2024 - December 2024Fixed price swapNYMEX Henry Hub10,000 $4.16
January 2024 - December 2024Call optionNYMEX Henry Hub40,000 $4.65
January 2025 - October 2025Call optionNYMEX Henry Hub40,000 $4.65
Oil(Bbl/d)($/Bbl)
January 2023 - December 2023Fixed price swapNYMEX WTI1,000 $87.62
NGL(Bbl/d)($/Bbl)
January 2023 - December 2023Fixed price swapMont Belvieu C31,000 $44.10
Credit Facility Redetermination
On May 2, 2022, the Company entered into the borrowing base redetermination agreement and first amendment to its credit agreement (the “Amendment”) governing the Credit Facility. The Amendment, among other things, (a) increased the borrowing base under the New Credit Agreement from $850 million to $1.0 billion as a result of the spring 2022 scheduled redetermination with aggregate elected lender commitments to remain at $700 million, (b) amended certain covenants related to hedging to ease certain requirements and limitations and (c) amended the covenants governing restricted payments to (i) increase the Net Leverage Ratio allowing unlimited restricted payments from 1.00 to 1.00 to 1.25 to 1.00 and (ii) permit additional restricted payments to redeem preferred equity until December 31, 2022 provided certain leverage, no event of default or borrowing base deficiency and availability tests are met and (d) provide for the transition from a LIBOR to a SOFR benchmark, with a 10 basis point credit spread adjustment for all tenors.
Expanded Common Stock Repurchase Program
In April 2022, the Company's Board of Directors approved an increase to the authorized common stock repurchase amounts under its Repurchase Program from $100 million to $200 million.
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ITEM 2.MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Introduction
Management's Discussion and Analysis of Financial Condition and Results of Operations (MD&A) is intended to provide the reader of the financial statements with a narrative from the perspective of management on the financial condition, results of operations, liquidity and certain other factors that may affect the Company's operating results. MD&A should be read in conjunction with the financial statements and related Notes included in Part I, Item 1 of this Quarterly Report on Form 10-Q.
The following information updates the discussion of Gulfport’s financial condition provided in its Annual Report on Form 10-K for the year ended December 31, 2021 (“2021 Form 10-K”), and analyzes the changes in the results of operations between the periods of January 1, 2022 through March 31, 2022 (“Successor Quarter”) and January 1, 2021, through March 31, 2021 (“Predecessor Quarter”). For definitions of commonly used natural gas and oil terms found in this Quarterly Report on Form 10-Q, please refer to the “Definitions” provided in this report and in our 2021 Form 10-K.
Gulfport is an independent natural gas-weighted exploration and production company with assets primarily located in the Appalachia and Anadarko basins. Our principal properties are located in eastern Ohio targeting the Utica and in central Oklahoma targeting the SCOOP Woodford and SCOOP Springer formations. Our strategy is to develop our assets in a safe, environmentally responsible manner, while generating sustainable cash flow, improving margins and operating efficiencies and returning capital to shareholders. To accomplish these goals, we allocate capital to projects we believe offer the highest rate of return and we deploy leading drilling and completion techniques and technologies in our development efforts.
Recent Developments
Share Repurchase Program
On November 1, 2021, our board of directors has approved a stock Repurchase Program to acquire up to $100 million of our outstanding common stock ("Repurchase Program"). Purchases under the Repurchase Program may be made from time to time in open market or privately negotiated transactions, and will be subject to available liquidity, market conditions, credit agreement restrictions, applicable legal requirements, contractual obligations and other factors. The Repurchase Program does not require us to acquire any specific number of shares of common stock. We intend to purchase shares under the Repurchase Program with available funds while maintaining sufficient liquidity to fund our capital development program. The Repurchase Program is authorized to extend through December 31, 2022 and may be suspended from time to time, modified, extended or discontinued by the board of directors at any time. Any shares of common stock repurchased are expected to be cancelled. As of March 31, 2022, 438,082 shares have been repurchased for approximately $35.5 million under the Repurchase Program at a weighted average price of $81.06 per share.
In April 2022, our Board of Directors approved an increase to the authorized common stock repurchase amounts under our Repurchase Program from $100 million to $200 million.
Inflation and Changes in Commodity Prices
Our revenues, the value of our assets and our ability to obtain bank loans or additional capital on attractive terms have been and will continue to be affected by changes in natural gas, oil and NGL prices and the costs to produce our reserves. Natural gas, oil and NGL prices are subject to significant fluctuations that are beyond our ability to control or predict. Certain of our capital expenditures and expenses are affected by general inflation and we expect costs for the remainder of 2022 to continue to be a function of supply and demand.
Impact of the War in Ukraine
The invasion of Ukraine by Russia and the sanctions imposed in response to the crisis have increased volatility in the global financial markets and are expected to have further global economic consequences, including disruptions of the global supply chain and energy markets. The ultimate impact of the war in Ukraine will depend on future developments and the timing and extent to which normal economic and operating conditions resume.
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2022 Operational and Financial Highlights
During the first quarter of 2022, we had the following notable achievements:
Reported total net production of 1,008 MMcfe per day.
Turned to sales five gross (4.8 net) operated wells.
Generated $253.7 million of operating cash flows.
Reduced total debt by $139.0 million as compared to December 31, 2021.
Repurchased 438,082 shares for $35.5 million at a weighted average price of $81.06 per share.
2022 Production and Drilling Activity
Production Volumes
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Natural gas (Mcf/day)
Utica761,810 797,452 
SCOOP162,654 111,708 
Other32 80 
Total924,496 909,240 
Oil and condensate (Bbl/day)
Utica697 1,403 
SCOOP2,928 2,379 
Other40 
Total3,632 3,822 
NGL (Bbl/day)
Utica2,183 2,665 
SCOOP8,111 5,758 
Other
Total10,294 8,427 
Combined (Mcfe/day)
Utica779,089 821,858 
SCOOP228,885 160,528 
Other77 343 
Total1,008,052 982,729 
Totals may not sum or recalculate due to rounding.
Our total net production averaged approximately 1,008.1 MMcfe per day during the Successor Quarter, as compared to 982.7 MMcfe per day during the Predecessor Quarter. The 3% increase in production per day is largely the result of the improved base production associated with our 2021 development program, strong uptime during the winter months of 2022 and the addition of five gross SCOOP wells performing above the Company expectations.
Utica. We spud five gross (5.0 net) wells in the Utica during the Successor Quarter, all of which were being drilled at March 31, 2022. In addition, we completed three gross (1.7) net operated wells. We did not participate in any additional wells that were drilled by other operators on our Utica acreage.
As of April 25, 2022, we had two operated drilling rigs running in the Utica, and we expect to drop to one operated drilling rig during the second half of 2022.
29

SCOOP. We spud four gross (2.8 net) wells in the SCOOP during the Successor Quarter, all of which were being drilled at March 31, 2022. In addition, we completed five gross (4.8 net) operated wells. We also participated in an additional six gross (0.002 net) wells that were drilled by other operators on our SCOOP acreage.
As of April 25, 2022, we had two operated drilling rigs running in the SCOOP, and we expect to conclude the 2022 drilling program mid-year for an average of one operated drilling rig in 2022.
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RESULTS OF OPERATIONS
Comparison of the Three Month Periods Ended March 31, 2022 and 2021
Natural Gas, Oil and NGL Production and Pricing (sales totals in thousands)
The following table summarizes our natural gas, oil and condensate and NGL production, sales and related pricing for the Successor Quarter as compared to the Predecessor Quarter. Some totals below may not sum or recalculate due to rounding.
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Natural gas sales
Natural gas production volumes (MMcf)83,205 81,832 
Natural gas production volumes (MMcf) per day924 909 
Total sales$405,212 $235,321 
Average price without the impact of derivatives ($/Mcf)$4.87 $2.88 
Impact from settled derivatives ($/Mcf)$(1.34)$— 
Average price, including settled derivatives ($/Mcf)$3.53 $2.88 
Oil and condensate sales
Oil and condensate production volumes (MBbl)327 344 
Oil and condensate production volumes (MBbl) per day
Total sales$30,239 $18,239 
Average price without the impact of derivatives ($/Bbl)$92.51 $53.03 
Impact from settled derivatives ($/Bbl)$(24.91)$— 
Average price, including settled derivatives ($/Bbl)$67.60 $53.03 
NGL sales
NGL production volumes (MBbl)926 758 
NGL production volumes (MBbl) per day10 
Total sales$45,284 $23,776 
Average price without the impact of derivatives ($/Bbl)$48.88 $31.35 
Impact from settled derivatives ($/Bbl)$(6.20)$— 
Average price, including settled derivatives ($/Bbl)$42.68 $31.35 
Natural gas, oil and condensate and NGL sales
Natural gas equivalents (MMcfe)90,725 88,446 
Natural gas equivalents (MMcfe) per day1,008 983 
Total sales$480,735 $277,336 
Average price without the impact of derivatives ($/Mcfe)$5.30 $3.14 
Impact from settled derivatives ($/Mcfe)$(1.38)$— 
Average price, including settled derivatives ($/Mcfe)$3.92 $3.14 
Production Costs:
Average lease operating expenses ($/Mcfe)$0.19 $0.14 
Average taxes other than income ($/Mcfe)$0.14 $0.10 
Average transportation, gathering, processing and compression ($/Mcfe)$0.93 $1.20 
Total lease operating expenses, midstream costs and production taxes ($/Mcfe)$1.27 $1.44 
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Natural Gas, Oil and Condensate and NGL Sales (in thousands)
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021% Change
Natural gas$405,212 $235,321 72 %
Oil and condensate30,239 18,239 66 %
NGL45,284 23,776 90 %
Natural gas, oil and condensate and NGL sales$480,735 $277,336 73 %
The increase in natural gas sales without the impact of derivatives when comparing the Successor Quarter to the Predecessor Quarter was due to a 69% increase in realized natural gas prices combined with a 2% increase in sales volumes. The realized price change was primarily driven by the significant increase in the average Henry Hub gas index from $2.69 per Mcf in the Predecessor Quarter to $4.95 per Mcf during the Successor Quarter.
The increase in oil and condensate sales without the impact of derivatives when comparing the Successor Quarter to the Predecessor Quarter was due to an 74% increase in realized prices, partially offset by a 5% decrease in sales volumes. The realized price change was driven by the significant increase in the average WTI crude index from $57.84 per barrel in the Predecessor Quarter to $94.29 per barrel during the Successor Quarter.
The increase in NGL sales without the impact of derivatives when comparing the Successor Quarter to the Predecessor Quarter was due to a 56% increase in realized prices combined with a 22% increase in NGL sales volumes. The realized price change was driven by the significant increase in the average Mont Belvieu NGL index from $32.59 per barrel in the Predecessor Quarter to $54.24 per barrel during the Successor Quarter.
Natural Gas, Oil and NGL Derivatives (in thousands)
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Natural gas derivatives - fair value losses$(619,319)$(25,538)
Natural gas derivatives - settlement (losses) gains(111,157)125 
Total losses on natural gas derivatives(730,476)(25,413)
Oil derivatives - fair value losses(29,853)(1,731)
Oil derivatives - settlement losses(8,144)— 
Total losses on oil derivatives(37,997)(1,731)
NGL derivatives - fair value losses(14,333)(2,834)
NGL derivatives - settlement losses(5,745)— 
Total losses on NGL derivatives(20,078)(2,834)
Total losses on natural gas, oil and NGL derivatives$(788,551)$(29,978)
We recognize fair value changes on our natural gas, oil and NGL derivative instruments in each reporting period. The changes in fair value resulted from new positions and settlements that occurred during each period, as well as the relationship between contract prices and the associated forward curves. The significant increase in losses compared to the Predecessor Quarter is primarily the result of an increase in both realized and futures pricing for oil, natural gas, and NGL. See Note 8 of our consolidated financial statements for hedged volumes and pricing.
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Lease Operating Expenses (in thousands, except per unit)
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021% Change
Lease operating expenses
Utica$13,188 $9,222 43 %
SCOOP4,452 3,357 33 %
Other74 (95)%
Total lease operating expenses$17,644 $12,653 39 %
Lease operating expenses per Mcfe
Utica$0.19 $0.12 51 %
SCOOP0.22 0.23 (7)%
Other0.51 2.41 (79)%
Total lease operating expenses per Mcfe$0.19 $0.14 36 %
The increase in total and per unit LOE for the Successor Quarter were primarily the result of increased water hauling, driven by recent wells turned to sales, disposal and compression expenses throughout our Utica operations.
Taxes Other Than Income (in thousands, except per unit)
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021% Change
Production taxes$9,472 $5,803 63 %
Property taxes1,893 1,912 (1)%
Other1,103 989 11 %
Total taxes other than income$12,468 $8,705 43 %
Total taxes other than income per Mcfe$0.14 $0.10 40 %
The increase in total and per unit taxes other than income was primarily related to an increase in production taxes resulting from the significant increase in our natural gas, oil and NGL revenues excluding the impact of hedges discussed above.
Transportation, Gathering, Processing and Compression (in thousands, except per unit)
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021% Change
Transportation, gathering, processing and compression$84,792 $105,867 (20)%
Transportation, gathering, processing and compression per Mcfe$0.93 $1.20 (22)%
The decrease in total and per unit transportation, gathering, processing and compression was primarily related to savings associated with rejected midstream contracts and renegotiation through the bankruptcy process.
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Depreciation, Depletion and Amortization (in thousands, except per unit)
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021% Change
Depreciation, depletion and amortization of oil and gas properties$61,942 $39,767 56 %
Depreciation, depletion and amortization of other property and equipment342 1,380 (75)%
Total Depreciation, depletion and amortization$62,284 $41,147 51 %
Depreciation, depletion and amortization per Mcfe$0.69 $0.47 48 %
The increase in total and per unit depreciation, depletion and amortization of our oil and gas properties for the Successor Quarter compared to the Predecessor Quarter is primarily the result of an increased depletion rate as a result of the fresh start valuations on our oil and natural gas properties.
Impairment of Other Property and Equipment
We recognized a $14.6 million impairment charge on the Company's corporate headquarters during the Predecessor Quarter as a result in a change in expected future use.
General and Administrative Expenses (in thousands, except per unit)
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021% Change
General and administrative expenses, gross$15,047 $21,317 (29)%
Reimbursed from third parties(3,198)(3,039)%
Capitalized general and administrative expenses(4,744)(5,521)(14)%
General and administrative expenses, net$7,105 $12,757 (44)%
General and administrative expenses, net per Mcfe$0.08 $0.14 (46)%
The decrease in general and administrative expenses for the Successor Quarter compared to the Predecessor Quarter was primarily driven by retention payments made during the Predecessor Quarter and our continued focus on the workforce and leadership structure to align to our current operating environment.
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Interest Expense (in thousands, except per unit)
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Interest on 2026 Senior Notes$11,051 $— 
Interest expense on Credit Facility2,268 — 
Amortization of loan costs665 — 
Interest on DIP Credit Facility— 2,166 
Interest expense on Pre-Petition Revolving Credit Facility— 1,020 
Other— 75 
Total interest expense$13,984 $3,261 
Interest expense per Mcfe$0.15 $0.04 
The change in interest expense when comparing the Successor Quarter to the Predecessor Quarter was due to the changes in our debt structure upon emergence from Chapter 11.
Reorganization Items, Net
The following table summarizes costs associated with our bankruptcy in the Company's consolidated statements of operations for the Predecessor Quarter (in thousands):
Predecessor
Three Months Ended March 31, 2021
Legal and professional fees$40,783 
Adjustment to allowed claims2,088 
Gain on settlement of pre-petition accounts payable(4,150)
Reorganization items, net$38,721 
Other, net (in thousands)
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021% Change
Other, net$(14,810)$(247)5896 %
The increase in other income when comparing the Successor Quarter to the Predecessor Quarter was due primarily to settlement payment receipts as discussed in Note 7.
Income Taxes
We did not record any income tax expense for the Successor Quarter or Predecessor Quarter as a result of maintaining a full valuation allowance against our net deferred tax asset. See Note 12 for further details of our valuation allowance.
35

Liquidity and Capital Resources
Overview. We strive to maintain sufficient liquidity to ensure financial flexibility, withstand commodity price volatility, fund our development projects, operations and capital expenditures and return capital to shareholders. We utilize derivative contracts to reduce the financial impact of commodity price volatility and provide a level of certainty to the Company's cash flows. Since the Emergence Date, we have generally funded our operations, planned capital expenditures and any share repurchases with cash flow from our operating activities, cash on hand, and borrowings under our revolving credit facility. Additionally, we may access debt and equity markets and sell properties to enhance our liquidity.
For the Successor Quarter, our primary sources of capital resources and liquidity have consisted of internally generated cash flows from operations, and our primary uses of cash have been for development of our oil and natural gas properties, the repayment of debt and share repurchases.
We believe our annual free cash flow generation, borrowing capacity under the Credit Facility and cash on hand will provide sufficient liquidity to fund our operations, capital expenditures, interest expense and any return of capital to shareholders, if declared by the Board, during the next 12 months.
To the extent actual operating results, realized commodity prices or uses of cash differ from our assumptions, our liquidity could be adversely affected. See Note 3 of our consolidated financial statements for further discussion of our debt obligations, including the principal and carrying amounts of our senior notes.
As of March 31, 2022, we had $5.9 million of cash and cash equivalents, $25.0 million of borrowings under our Credit Facility, $113.2 million of letters of credit outstanding, and $550 million of outstanding 2026 Senior Notes. Our total principal amount of funded debt as of March 31, 2022 was $575.0 million.
As of April 25, 2022 we had $59.1 million of cash and cash equivalents, no borrowings under our Credit Facility, $113.2 million of letters of credit outstanding, and $550 million of outstanding 2026 Senior Notes.
Debt. On October 14, 2021, we entered into the Third Amended and Restated Credit Agreement with JPMorgan Chase Bank, N.A., as administrative agent, and various lender parties. The Credit Facility provides for an aggregate maximum principal amount of up to $1.5 billion, an initial borrowing base of $850.0 million and an initial aggregate elected commitment amount of $700.0 million. The credit agreement also provides for a $175.0 million sublimit of the aggregate commitments that is available for the issuance of letters of credit.
On May 2, 2022, we entered into the borrowing base redetermination agreement and first amendment to our credit agreement (the “Amendment”) governing the Credit Facility. The Amendment, among other things, (a) increased the borrowing base under the New Credit Agreement from $850 million to $1.0 billion as a result of the spring 2022 scheduled redetermination with aggregate elected lender commitments to remain at $700 million, (b) amended certain covenants related to hedging to ease certain requirements and limitations and (c) amended the covenants governing restricted payments to (i) increase the Net Leverage Ratio allowing unlimited restricted payments from 1.00 to 1.00 to 1.25 to 1.00 and (ii) permit additional restricted payments to redeem preferred equity until December 31, 2022 provided certain leverage, no event of default or borrowing base deficiency and availability tests are met and (d) provide for the transition from a LIBOR to a SOFR benchmark, with a 10 basis point credit spread adjustment for all tenors.
Additionally, on the Emergence Date, pursuant to the terms of the Plan, we issued our 2026 Senior Notes.
The 2026 Senior Notes are guaranteed on a senior unsecured basis by each of the Company's subsidiaries that guarantee the Credit Facility.
See Note 3 of our consolidated financial statements for additional discussion of our outstanding debt.
Preferred Dividends. As discussed in Note 4 of our consolidated financial statements, holders of preferred stock are entitled to receive cumulative quarterly dividends at a rate of 10% per annum of the Liquidation Preference (as defined below) with respect to cash dividends and 15% per annum of the Liquidation Preference with respect to dividends paid in kind as additional shares of preferred stock (“PIK Dividends”). We currently have the option to pay either a cash or PIK dividend on a quarterly basis.
During the Successor Quarter, the company paid $1.5 million of cash dividends to holders of our preferred stock.
36

Supplemental Guarantor Financial Information. The 2026 Senior Notes are guaranteed on a senior unsecured basis by all existing consolidated subsidiaries that guarantee our Credit Facility or certain other debt (the “Guarantors”). The 2026 Senior Notes are not guaranteed by Grizzly Holdings or Mule Sky, LLC (the “Non-Guarantors”). The Guarantors are 100% owned by the Parent, and the guarantees are full, unconditional, joint and several. There are no significant restrictions on the ability of the Parent or the Guarantors to obtain funds from each other in the form of a dividend or loan. The guarantees rank equally in the right of payment with all of the senior indebtedness of the subsidiary guarantors and senior in the right of payment to any future subordinated indebtedness of the subsidiary guarantors. The 2026 Senior Notes and the guarantees are effectively subordinated to all of our and the subsidiary guarantors' secured indebtedness (including all borrowings and other obligations under our amended and restated credit agreement) to the extent of the value of the collateral securing such indebtedness, and structurally subordinated to all indebtedness and other liabilities of any of our subsidiaries that do not guarantee the 2026 Senior Notes.
SEC Regulation S-X Rule 13-01 requires the presentation of "Summarized Financial Information" to replace the "Condensed Consolidating Financial Information" required under Rule 3-10. Rule 13-01 allows the omission of Summarized Financial Information if assets, liabilities and results of operations of the Guarantors are not materially different than the corresponding amounts presented in our consolidated financial statements. The Parent and Guarantor subsidiaries comprise our material operations. Therefore, we concluded that the presentation of the Summarized Financial Information is not required as our Summarized Financial Information of the Guarantors is not materially different from our consolidated financial statements.
Derivatives and Hedging Activities. Our results of operations and cash flows are impacted by changes in market prices for natural gas, oil and NGL. To mitigate a portion of the exposure to adverse market changes, we have entered into various derivative instruments. Our natural gas, oil and NGL derivative activities, when combined with our sales of natural gas, oil and NGL, allow us to predict with greater certainty the total revenue we will receive. See Item 3 Quantitative and Qualitative Disclosures About Market Risk for further discussion on the impact of commodity price risk on our financial position. Additionally, see Note 8 of our consolidated financial statements for further discussion of derivatives and hedging activities.
Capital Expenditures. Our capital expenditures have historically been related to the execution of our drilling and completion activities in addition to certain lease acquisition activities. Our capital investment strategy is focused on prudently developing our existing properties to generate sustainable cash flow considering current and forecasted commodity prices. For the Successor Quarter, the Company's incurred capital expenditures totaled $100.4 million, of which $94.3 million related to drilling and completion activity and $6.1 million related to leasehold and land investment.
Our capital expenditures for 2022 are currently estimated to be in the range of $355 million to $395 million for drilling and completion expenditures. In addition, we currently expect to spend approximately $25 million in 2022 for non-drilling and completion expenditures, which primarily includes leasehold acquisition, lease extension and lease maintenance payments in the Utica Shale.
Sources and Uses of Cash
The following table presents the major changes in cash and cash equivalents for the Successor Quarter and Predecessor Quarter (in thousands):
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Net cash provided by operating activities$253,696 $123,175 
Capital expenditures(80,271)(56,895)
Debt activity, net(139,000)23,848 
Repurchases of common stock(30,192)— 
Preferred stock dividends(1,447)— 
Other(148)(288)
Net Change in cash, cash equivalents and restricted cash$2,638 $89,840 
Cash, cash equivalents and restricted cash at end of period$5,898 $179,701 
Net Cash Provided by Operating Activities
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Net cash flow provided by operating activities was $253.7 million for the Successor Quarter as compared to $123.2 million for the Predecessor Quarter. The increase was primarily the result of an increase in cash receipts from our oil and natural gas purchasers due to increased realized commodities pricing. We also incurred significant charges related to our Chapter 11 reorganization in the Predecessor Quarter prior to our emergence in the second quarter of 2021.
Capital Expenditures
During the Successor Quarter, we spud five gross and net operated wells and completed three gross (1.7 net) operated wells in the Utica for a total incurred cost of approximately $43.6 million. During the Successor Quarter, we spud four gross (2.8 net) operated wells and completed and commenced sales from five gross (4.8 net) operated wells in the SCOOP for a total incurred cost of approximately $45.3 million.
During the Successor Quarter, we did not participate in any wells that were spud or turned to sales by other operators on our Utica acreage. In addition, six gross (0.002 net) wells were spud and 13 gross (0.86 net) wells were turned to sales by other operators on our SCOOP acreage during the Successor Quarter.
Incurred capital expenditures and cash capital expenditures may vary from period to period due to the cash payment cycle. Cash capital expenditures for the Successor Quarter and Predecessor Quarter were as follows (in thousands):
SuccessorPredecessor
Three Months Ended March 31, 2022Three Months Ended March 31, 2021
Oil and Natural Gas Property Cash Expenditures:
Drilling and completion costs
$70,360 $51,702 
Leasehold acquisitions
5,775 2,354 
Other
4,136 2,839 
Total oil and natural gas property expenditures
$80,271 $56,895 
Debt Activity
In the Successor Quarter, the Company had $456.0 million and $317.0 million in borrowings and repayments, respectively, on its Credit Facility. As of April 25, 2022 the Company had no borrowings outstanding on its Credit Facility.
Repurchases of Common Stock
During the Successor Quarter, we repurchased 438,082 of our common shares for approximately $35.5 million under the Repurchase Program at a weighted average price of $81.06 per share. As of April 25, 2022, we repurchased 736,448 shares for approximately $62.0 million under the Repurchase Program at a weighted average price of $84.19 per share.
Preferred Stock Dividends
During the Successor Quarter, the company paid $1.5 million of cash dividends to holders of our preferred stock.
Contractual and Commercial Obligations
We have various contractual obligations in the normal course of our operations and financing activities, as discussed in Note 7. There have been no other material changes to our contractual obligations from those disclosed in our Annual Report on Form 10-K for the year ended December 31, 2021.    
Off-balance Sheet Arrangements
We may enter into off-balance sheet arrangements and transactions that can give rise to material off-balance sheet obligations.  As of March 31, 2022, our material off-balance sheet arrangements and transactions include $113.2 million in letters of credit outstanding against our Credit Facility and $33.1 million in surety bonds issued. Both the letters of credit and surety bonds are being used as financial assurance, primarily on certain firm transportation agreements. There are no other transactions, arrangements or other relationships with unconsolidated entities or other persons that are reasonably likely to
38

materially affect our liquidity or availability of our capital resources. See Note 7 of our consolidated financial statements for further discussion of the various financial guarantees we have issued.
Critical Accounting Policies and Estimates
As of March 31, 2022, there have been no significant changes in our critical accounting policies from those disclosed in our 2021 Annual Report on Form 10-K.
39

ITEM 3.QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
Natural Gas, Oil and Natural Gas Liquids Derivative Instruments. Our results of operations and cash flows are impacted by changes in market prices for natural gas, oil and NGL. To mitigate a portion of our exposure to adverse price changes, we have entered into various derivative instruments. Our natural gas, oil and NGL derivative activities, when combined with our sales of natural gas, oil and NGL, allow us to predict with greater certainty the revenue we will receive. We believe our derivative instruments continue to be highly effective in achieving our risk management objectives.
Our general strategy for protecting short-term cash flow and attempting to mitigate exposure to adverse natural gas, oil and NGL price changes is to hedge into strengthening natural gas, oil and NGL futures markets when prices reach levels that management believes provide reasonable rates of return on our invested capital. Information we consider in forming an opinion about future prices includes general economic conditions, industrial output levels and expectations, producer breakeven cost structures, liquefied natural gas trends, oil and natural gas storage inventory levels, industry decline rates for base production and weather trends. Executive management is involved in all risk management activities and the board of directors reviews our derivative program at its quarterly board meetings. We believe we have sufficient internal controls to prevent unauthorized trading.
We use derivative instruments to achieve our risk management objectives, including swaps, options and costless collars. All of these are described in more detail below. We typically use swaps for a large portion of the oil and natural gas price risk we hedge. We have also sold calls, taking advantage of premiums associated with market price volatility.
We determine the notional volume potentially subject to derivative contracts by reviewing our overall estimated future production levels, which are derived from extensive examination of existing producing reserve estimates and estimates of estimated production from new drilling. Production forecasts are updated at least monthly and adjusted if necessary to actual results and activity levels. We do not enter into derivative contracts for volumes in excess of our share of forecasted production, and if production estimates were lowered for future periods and derivative instruments are already executed for some volume above the new production forecasts, the positions are typically reversed. The actual fixed prices on our derivative instruments is derived from the reference prices from 3rd party indices such as NYMEX. All of our commodity derivative instruments are net settled based on the difference between the fixed price as stated in the contract and the floating-price, resulting in a net amount due to or from the counterparty.
We review our derivative positions continuously and if future market conditions change and prices are at levels we believe could jeopardize the effectiveness of a position, we will mitigate this risk by either negotiating a cash settlement with our counterparty, restructuring the position or entering a new trade that effectively reverses the current position. The factors we consider in closing or restructuring a position before the settlement date are identical to those we review when deciding to enter the original derivative position.
We have determined the fair value of our derivative instruments utilizing established index prices, volatility curves, discount factors and option pricing models. These estimates are compared to counterparty valuations for reasonableness. Derivative transactions are also subject to the risk that counterparties will be unable to meet their obligations. This non-performance risk is considered in the valuation of our derivative instruments, but to date has not had a material impact on the values of our derivatives. The values we report in our financial statements are as of a point in time and subsequently change as these estimates are revised to reflect actual results, changes in market conditions and other factors. See Note 9 of our consolidated financial statements for further discussion of the fair value measurements associated with our derivatives.
As of March 31, 2022, our natural gas, oil and NGL derivative instruments consisted of the following types of instruments:
Swaps: We receive a fixed price and pay a floating market price to the counterparty for the hedged commodity. In exchange for higher fixed prices on certain of our swap trades, we may sell call options.
Basis Swaps: These instruments are arrangements that guarantee a fixed price differential to NYMEX from a specified delivery point. We receive the fixed price differential and pay the floating market price differential to the counterparty for the hedged commodity.
Costless Collars: Each two-way price collar has a set floor and ceiling price for the hedged production. If the applicable monthly price indices are outside of the ranges set by the floor and ceiling prices in the various collars, the Company will cash-settle the difference with the counterparty.
40

Call Options: We sell, and occasionally buy, call options in exchange for a premium. At the time of settlement, if the market price exceeds the fixed price of the call option, we pay the counterparty the excess on sold call options, and we receive the excess on bought call options. If the market price settles below the fixed price of the call option, no payment is due from either party.
Our hedge arrangements may expose us to risk of financial loss in certain circumstances, including instances where production is less than expected or commodity prices increase. At March 31, 2022, we had a net liability derivative position of $1.1 billion as compared to a net liability derivative position of $402.0 million as of December 31, 2021. Utilizing actual derivative contractual volumes, a 10% increase in underlying commodity prices would have increased our liability by approximately $262.2 million, while a 10% decrease in underlying commodity prices would have decreased our liability by approximately $254.3 million. However, any realized derivative gain or loss would be substantially offset by a decrease or increase, respectively, in the actual sales value of production covered by the derivative instrument.
Interest Rate Risk. Our revolving amended and restated credit agreement is structured under floating rate terms, as advances under this facility may be in the form of either base rate loans or Eurodollar loans. As such, our interest expense is sensitive to fluctuations in the prime rates in the United States, or, if the Eurodollar rates are elected, the Eurodollar rates. At March 31, 2022, we had $25.0 million in borrowings outstanding under our Credit Facility which bore interest at a weighted average rate of 3.21%. As of March 31, 2022, we did not have any interest rate swaps to hedge interest rate risks.
ITEM 4.CONTROLS AND PROCEDURES
Evaluation of Disclosure Control and Procedures. Under the supervision of our Chief Executive Officer and our Chief Financial Officer, and with participation of management, we have established disclosure controls and procedures that are designed to ensure that information required to be disclosed by us in the reports that we file or submit under the Exchange Act is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms. The disclosure controls and procedures are also intended to ensure that such information is accumulated and communicated to management, including our Chief Executive Officer and our Chief Financial Officer, as appropriate to allow timely decisions regarding required disclosures.
As of March 31, 2022, an evaluation was performed under the supervision and with the participation of management, including our Chief Executive Officer and Chief Financial Officer, of the effectiveness of the design and operation of our disclosure controls and procedures pursuant to Rule 13a-15(b) under the Exchange Act. Based upon our evaluation, our Chief Executive Officer and our Chief Financial Officer have concluded that, as of March 31, 2022, our disclosure controls and procedures are effective.
In designing and evaluating the Company's disclosure controls and procedures, management recognizes that any controls and procedures, no matter how well designed and operated, can provide only reasonable, and not absolute, assurance that the objectives of the control system will be met. In addition, the design of any control system is based in part upon certain assumptions about the likelihood of future events and the application of judgment in evaluating the cost-benefit relationship of possible controls and procedures. Because of these and other inherent limitations of control systems, there is only reasonable assurance that the Company's controls will succeed in achieving their goals under all potential future conditions.
Changes in Internal Control over Financial Reporting. There have not been any changes in our internal control over financial reporting that occurred during our last fiscal quarter that have materially affected, or are reasonably likely to materially affect, internal controls over financial reporting.

41

PART II
ITEM 1.LEGAL PROCEEDINGS
The information with respect to this Item 1. Legal Proceedings is set forth in Note 7 of our consolidated financial statements.
ITEM 1A.RISK FACTORS
Our business has many risks. Factors that could materially adversely affect our business, financial condition, operating results or liquidity and the trading price of our common stock or senior notes are described below and under "Risk Factors" in Item 1A of our Annual Report on Form 10-K for the year ended December 31, 2021.
ITEM 2.UNREGISTERED SALES OF EQUITY SECURITIES AND USE OF PROCEEDS
Unregistered Sales of Equity Securities
    None.
Issuer Repurchases of Equity Securities
Our common stock repurchase activity for the three months ended March 31, 2022 was as follows:
Period
Total Number of Shares Purchased(1)
Average Price Paid per Share
Total number of shares purchased as part of publicly announced plans or programs(2)
Approximate maximum dollar value of shares that may yet be purchased under the plans or programs(2)
January 1 - January 311,189 $66.57 $— 
February 1 - February 28— $— $— 
March 1 - March 31438,082 $81.06 438,082 $64,500,000 
Total439,271 $81.02 438,082 
_____________________
(1)    During January 2022, we repurchased and canceled 1,189 shares of our common stock at a weighted average price of $66.57 to satisfy tax withholding requirements incurred upon the vesting of restricted stock unit awards.
(2)    In November 2021 our Board of Directors approved a stock repurchase program to acquire up to $100.0 million of its Common Stock. The stock repurchase program extends through December 31, 2022. At March 31, 2022, there was approximately $64.5 million that may yet be repurchased under $100.0 million approved amount.
ITEM 3.
DEFAULTS UPON SENIOR SECURITIES
None.
ITEM 4.
MINE SAFETY DISCLOSURES
Not applicable.
42

ITEM 5.
OTHER INFORMATION
Chief Executive Officer Employment Agreement
Effective April 29, 2022, the Company and the Company’s Chief Executive Officer, Timothy Cutt, entered into an employment agreement (the “CEO Employment Agreement”), which supersedes Mr. Cutt’s prior offer letter, dated as of May 17, 2021 and amended on September 2, 2021, in its entirety.
The CEO Employment Agreement does not provide for a fixed term of employment. During Mr. Cutt’s term of employment as the Chief Executive Officer of the Company, Mr. Cutt will also serve as the Executive Chairman of the Company’s Board of Directors (the “Board”). Subject to the Board’s ability to remove Mr. Cutt at any time, Mr. Cutt will continue to serve as Executive Chairman of the Board following the conclusion of the term of Mr. Cutt’s employment as Chief Executive Officer of the Company. Pursuant to the CEO Employment Agreement, Mr. Cutt will receive the following: (i) an annual base salary of $785,000, (ii) a target annual bonus opportunity equal to 120% of base salary, and (iii) eligibility to receive annual equity awards as determined in the sole discretion of the Compensation Committee of the Board.
Upon a termination of Mr. Cutt’s employment (i) by the Company without “Cause” or (ii) by Mr. Cutt for “Good Reason” (each as defined in the CEO Employment Agreement), in each case, following the occurrence of a “Change in Control” (as defined in the Company’s 2021 Stock Incentive Plan), subject to Mr. Cutt’s execution and non-revocation of a release of claims, Mr. Cutt will receive a cash severance payment equal to three times the sum of (x) Mr. Cutt’s then-current base salary plus (y) Mr. Cutt’s target annual bonus for the year in which such termination occurs, payable in a lump sum on the date that is 60 days following such termination of employment. Such severance is subject to forfeiture and clawback if Mr. Cutt breaches any of the restrictive covenants contained in the CEO Employment Agreement.
The CEO Employment Agreement provides for the following restrictive covenants: (i) non-solicitation of customers, employees or independent contractors during employment or service and for 12 months thereafter, (ii) perpetual non-disclosure of confidential information, and (iii) assignment of intellectual property.
The foregoing description of the CEO Employment Agreement is qualified in its entirety by reference to the full text of the CEO Employment Agreement, a copy of which is attached hereto as Exhibit 10.2 and is incorporated herein by reference.
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ITEM 6.EXHIBITS
INDEX OF EXHIBITS
Incorporated by Reference
Exhibit NumberDescriptionFormSEC File NumberExhibitFiling DateFiled or Furnished Herewith
2.18-K001-195142.24/29/2021
3.18-K000-195143.15/17/2021
3.28-K000-195143.25/17/2021
10.1X
10.2X
31.1X
31.2X
32.1X
32.2X
101.INSXBRL Instance Document - the instance document does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.X
101.SCHXBRL Taxonomy Extension Schema Document.X
101.CALXBRL Taxonomy Extension Calculation Linkbase Document.X
101.DEFXBRL Taxonomy Extension Definition Linkbase Document.X
101.LABXBRL Taxonomy Extension Labels Linkbase Document.X
101.PREXBRL Taxonomy Extension Presentation Linkbase Document.X
44

104Cover Page Interactive Data File - the cover page interactive data file does not appear in the Interactive Data File because its XBRL tags are embedded within the Inline XBRL document.X
45

SIGNATURES
In accordance with Section 13 or 15(d) of the Exchange Act, the registrant caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: May 4, 2022
 
GULFPORT ENERGY CORPORATION
By:/s/    William Buese
William Buese
Chief Financial Officer

46
Document

Exhibit 10.1
BORROWING BASE REDETERMINATION AGREEMENT
AND FIRST AMENDMENT TO CREDIT AGREEMENT

THIS BORROWING BASE REDETERMINATION AGREEMENT AND FIRST AMENDMENT TO CREDIT AGREEMENT (this “Amendment”), dated as of May 2, 2022, is entered into among Gulfport Energy Operating Corporation, a Delaware corporation (the “Borrower”); Gulfport Energy Corporation, a Delaware corporation (“Holdings”); each Subsidiary of Borrower listed on the signature pages hereto and party hereto as a Guarantor (collectively, the “Guarantors”); each of the Lenders from time to time party hereto; JPMorgan Chase Bank, N.A. (in its individual capacity, “JPMorgan”), as administrative agent for the Lenders, as defined below (in such capacity, together with its successors in such capacity, the “Administrative Agent”).
RECITALS
WHEREAS, the Borrower, Holdings, the lenders from time to time party thereto (the “Lenders”), the Administrative Agent, the Issuing Lenders and the other parties from time to time party thereto, are party to the Third Amended and Restated Credit Agreement, dated as of October 14, 2021 (as amended, modified, extended, restated, replaced, or supplemented from time to time prior to the date hereof, the “Existing Credit Agreement” and, as amended hereby and as may be further amended, modified, extended, restated, replaced, or supplemented from time to time, the “Credit Agreement”); and
WHEREAS, certain loans, commitments and/or other extensions of credit (the “Loans”) under the Credit Agreement incur or are permitted to incur interest, fees or other amounts based on the London Interbank Offered Rate as administered by the ICE Benchmark Administration (“LIBOR”) in accordance with the terms of the Credit Agreement;
WHEREAS, the Borrower, Holdings, the Administrative Agent and each Lender desire to make certain modifications to the Credit Agreement in advance of the pending cessation of LIBOR and to revise certain covenants in the Credit Agreement;
WHEREAS, the Borrower has provided the necessary reserve report information (the “Spring 2022 Redetermination Reserve Report”) for the Administrative Agent and the Lenders to complete the spring 2022 Scheduled Redetermination of the Borrowing Base and, after reviewing such reserve information, the Administrative Agent and the requisite Lenders have recommended increasing the Borrowing Base from $850,000,000 to $1,000,000,000;
NOW, THEREFORE, in consideration of the premises and the mutual covenants contained herein, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:
1.Defined Terms. Capitalized terms used herein but not otherwise defined herein shall have the meanings provided to such terms in the Credit Agreement, as amended by this Amendment.
2.Redetermination of the Borrowing Base. The Borrower and the Lenders party hereto agree that on and as of the Amendment Effective Date (defined below) the Borrowing Base shall be increased from $850,000,000 to $1,000,000,000 until such time as the Borrowing Base is redetermined or otherwise adjusted pursuant to the terms of the Credit Agreement. Both Holdings and the Borrower, on the one hand, and the Administrative Agent and the Lenders party hereto, on the other hand, agree that the redetermination of the Borrowing Base pursuant to
1



this Section 2 shall constitute the regularly Scheduled Redetermination of the Borrowing Base for the spring of 2022 (and not an interim redetermination of the Borrowing Base) pursuant to Section 2.07 of the Credit Agreement.
3.Amendments to Credit Agreement. As of the Amendment Effective Date, the body of the Existing Credit Agreement (including Exhibit E (Form of Borrowing Request), Exhibit F (Form of Interest Election Request), Exhibit K (Form of elected Commitment Increase Agreement), Exhibit L (Form of Additional Lender Agreement), but, for the avoidance of doubt, none of the other exhibits or schedules to the Credit Agreement) is amended as set forth in Exhibit A attached hereto, by deleting the stricken text (indicated textually in the same manner as the following example: stricken text) and to add the double-underlined text (indicated textually in the same manner as the following example: double-underlined text).
Notwithstanding the implementation of the amendments to the Existing Credit Agreement pursuant hereto, the parties hereto acknowledge and agree that: (a) any Borrowings of Eurodollar Loans (as defined in the Existing Credit Agreement) outstanding immediately prior to the Amendment Effective Date shall remain outstanding as Borrowings of Eurodollar Loans bearing interest at the same Adjusted LIBO Rate (as defined in the Existing Credit Agreement) applicable thereto immediately prior to the Amendment Effective Date until the expiration of the interest period applicable thereto, and the related provisions of the Existing Credit Agreement shall continue in effect solely with respect to such Borrowings of Eurodollar Loans until such time for the limited purposes set forth in this Section 3, (b) if any such Borrowings of Eurodollar Loans remain outstanding upon the expiration of the interest period applicable thereto, then such Borrowings of Eurodollar Loans shall be converted, at the election of the Borrower, into Borrowings consisting of ABR Loans, Term Benchmark Loans or RFR Loans (provided, that if no election as to the Type of Borrowing is specified, the Borrower shall be deemed to have requested an ABR Borrowing), and (c) no such Eurodollar Loans may be continued as (and no other Loans may be converted into) Eurodollar Loans pursuant to Section 2.04 of the Existing Credit Agreement or the Credit Agreement, and no new Eurodollar Loans may be requested by the Borrower (and no Lender shall advance any new Eurodollar Loans), after the Amendment Effective Date.
4.Payment of Expenses. The Borrower agrees to reimburse the Administrative Agent for all reasonable fees, charges and disbursements of the Administrative Agent in connection with the preparation, execution and delivery of this Amendment, including all reasonable fees, charges and disbursements of counsel to the Administrative Agent.
5.Conditions Precedent. This effectiveness of this Amendment is subject to the satisfaction of each of the following conditions (the date of the satisfaction of all such conditions, the “Amendment Effective Date”):
a.The Administrative Agent (or its counsel) shall have received from each of Holdings, the Borrower, each other Guarantor and each Lender either (x) a counterpart of this Amendment signed on behalf of such party or (y) written evidence reasonably satisfactory to the Administrative Agent (which may include delivery of a signed signature page of this Amendment by facsimile or other means of electronic transmission (e.g., “pdf”)) that such party has signed a counterpart of this Amendment.
b.The Borrower and each Guarantor shall have confirmed and acknowledged to the Administrative Agent and the Lenders, and by its execution and delivery of this Amendment, the Borrower and each Guarantor does hereby confirm and acknowledge to the Administrative Agent and the Lenders, that each of the representations and warranties of the Borrower and the Guarantors set forth in the Loan Documents is true and correct in all material respects (except for those which have a
2



materiality qualifier, which are true and correct in all respects as so qualified) on and as of the Amendment Effective Date, except to the extent any such representations and warranties are expressly limited to an earlier date, in which case, on and as of the Amendment Effective Date, such representations and warranties are true and correct in all material respects (except for those which have a materiality qualifier, which are true and correct in all respects as so qualified) as of such specified earlier date.
c.At the time of and immediately after effectiveness of this Amendment, no Default, Event of Default or Borrowing Base Deficiency shall have occurred and be continuing.
d.At the time of and immediately after effectiveness of this Amendment, the Borrower and its Restricted Subsidiaries shall not have Excess Cash in an amount greater than the Excess Cash Threshold.
6.Representations and Warranties. Each Credit Party represents and warrants to the Administrative Agent that, as of the date hereof:
a.this Amendment has been duly authorized, executed and delivered by such Credit Party and constitutes the legal, valid and binding obligation of such Credit Party enforceable against each such Credit Party in accordance with its terms, subject to applicable bankruptcy, insolvency, reorganization, moratorium or other laws affecting creditors’ rights generally and subject to general principles of equity, regardless of whether considered in a proceeding in equity or at law;
b.the execution, delivery and performance by each Credit Party of this Amendment (i) will not violate any applicable law or regulation or the charter, by-laws or other Organizational Documents of the Credit Parties or any Restricted Subsidiary or any order of any Governmental Authority (except, with respect to applicable law or regulations, for such violations that would not reasonably be expected to have a Material Adverse Effect), (ii) will not violate or result in a default under any indenture, agreement or other instrument evidencing or governing Material Debt binding upon the Credit Parties, the Restricted Subsidiaries or their respective Properties, or give rise to a right thereunder to require any payment to be made by the Credit Parties or any Restricted Subsidiary and (iii) will not result in the creation or imposition of any Lien on any Property of the Credit Parties or any Restricted Subsidiary (other than the Liens created by the Loan Documents);
c.at the time of and immediately after effectiveness of this Amendment, no Default, Event of Default or Borrowing Base Deficiency shall have occurred and be continuing; and
d.at the time of and immediately after effectiveness of this Amendment, the Borrower and its Restricted Subsidiaries shall not have Excess Cash in an amount greater than the Excess Cash Threshold.
7.Reaffirmation; Reference to and Effect on the Loan Documents.
a.From and after the Amendment Effective Date, each reference in the Credit Agreement to “hereunder,” “hereof,” “this Agreement” or words of like import and each reference in the other Loan Documents to “Credit Agreement,” “thereunder,” “thereof” or words of like import shall, unless the context otherwise requires, mean and be a reference to the Credit Agreement as amended by this Amendment. This Amendment is a Loan Document.
3



b.The Loan Documents, and the obligations of the Borrower and the other Credit Parties under the Loan Documents, are hereby ratified and confirmed and shall remain in full force and effect according to their terms.
c.The Borrower and each other Credit Party (i) acknowledges and consents to all of the terms and conditions of this Amendment, (ii) affirms all of its obligations under the Loan Documents, (iii) agrees that this Amendment and all documents executed in connection herewith do not operate to reduce or discharge its obligations under the Loan Documents, (iv) agrees that the Security Instruments continue to be in full force and effect and are not impaired or adversely affected in any manner whatsoever, (v) confirms its grant of security interests pursuant to the Security Instruments to which it is a party as Collateral for the Secured Obligations, and (vi) acknowledges that all Liens granted (or purported to be granted) pursuant to the Security Instruments remain and continue in full force and effect in respect of, and to secure, the Secured Obligations. Each Guarantor hereby reaffirms its obligations under each of the Guaranty and Collateral Agreement, each Mortgage and each Security Instrument Assignment to which such Guarantor is a party, and agrees that its obligation to guarantee the Secured Obligations is in full force and effect as of the date hereof.
d.The execution, delivery and effectiveness of this Amendment shall not, except as expressly provided herein, operate as a waiver of any right, power or remedy of any Lender, any Issuing Bank or the Administrative Agent under any of the Loan Documents, nor constitute a waiver of any provision of any of the Loan Documents.
e.In the event of any conflict between the terms of this Amendment and the terms of the Credit Agreement or the other Loan Documents, the terms hereof shall control.
8.Governing Law; Jurisdiction; Consent to Service of Process; Waiver of Jury Trial, Etc.
a.This Amendment shall be construed in accordance with and governed by the law of the State of New York, without regard to conflict of laws principles thereof to the extent such principles would cause the application of the law of another state.
b.EACH PARTY HERETO HEREBY AGREES AS SET FORTH IN SECTION 12.09 OF THE CREDIT AGREEMENT AS IF SUCH SECTION WAS SET FORTH IN FULL HEREIN.
9.Amendments; Headings; Severability. The Section headings used herein are for convenience of reference only, are not part of this Amendment and are not to affect the construction of, or to be taken into consideration in interpreting this Amendment. Any provision of this Amendment held to be invalid, illegal or unenforceable in any jurisdiction shall, as to such jurisdiction, be ineffective to the extent of such invalidity, illegality or unenforceability without affecting the validity, legality and enforceability of the remaining provisions hereof, and the invalidity of a particular provision in a particular jurisdiction shall not invalidate such provision in any other jurisdiction. The parties shall endeavor in good-faith negotiations to replace the invalid, illegal or unenforceable provisions with valid provisions, the economic effect of which comes as close as possible to that of the invalid, illegal or unenforceable provisions.
10.Execution in Counterparts. This Amendment may be executed in counterparts (and by different parties hereto on different counterparts), each of which shall constitute an original, but all of which when taken together shall constitute a single contract. Delivery of an executed counterpart of a signature page of this Amendment by telecopy, emailed pdf or any
4



other electronic means that reproduces an image of the actual executed signature page shall be effective as delivery of a manually executed counterpart of this Amendment. The words “execution,” “signed,” “signature,” “delivery,” and words of like import in or relating to any document to be signed in connection with this Amendment and the transactions contemplated hereby shall be deemed to include electronic signatures, deliveries or the keeping of records in electronic form, each of which shall be of the same legal effect, validity or enforceability as a manually executed signature, physical delivery thereof or the use of a paper-based recordkeeping system, as the case may be, to the extent and as provided for in any applicable law, including the Federal Electronic Signatures in Global and National Commerce Act, the New York State Electronic Signatures and Records Act, or any other similar state laws based on the Uniform Electronic Transactions Act; provided that nothing herein shall require the Administrative Agent to accept electronic signatures in any form or format without its prior written consent.
11.Notices. All notices hereunder shall be given in accordance with the provisions of Section 12.01 of the Credit Agreement.

(remainder of page intentionally left blank)

5



Each of the parties hereto has caused a counterpart of this Amendment to be duly executed and delivered as of the date first above written.
GULFPORT ENERGY CORPORATION
GULFPORT ENERGY OPERATING CORPORATION
GRIZZLY HOLDINGS, INC.
JAGUAR RESOURCES LLC
PUMA RESOURCES, INC.
GATOR MARINE, INC.
GATOR MARINE IVANHOE, INC.
WESTHAWK MINERALS LLC
GULFPORT MIDSTREAM HOLDINGS, LLC
GULFPORT APPALACHIA, LLC
GULFPORT MIDCON, LLC
MULE SKY LLC
By:        
Name:
Title:



Signature Page to Borrowing Base Redetermination Agreement
and First Amendment to Credit Agreement



ADMINISTRATIVE AGENT AND LENDER:
JPMorgan Chase Bank, N.A.,
as Administrative Agent and a Lender
By: _________________________
Name:     
Title:    


Signature Page to Borrowing Base Redetermination Agreement
and First Amendment to Credit Agreement



LENDERS:     ]
By: _________________________
Name:
Title:


Signature Page to Borrowing Base Redetermination Agreement
and First Amendment to Credit Agreement





Exhibit A

Revisions to the Credit Agreement and Certain Exhibits

Third Amended and Restated Credit Agreement
Dated as of October 14, 2021,
among
Gulfport Energy Operating Corporation,
As Borrower,
Gulfport Energy Corporation,
as Holdings,
JPMorgan Chase bank, N.A.,
As Administrative Agent
and
JPMorgan Chase Bank, N.A., Citizens Bank, N.A,
Fifth Third Bank National Association, KeyBanc Capital Markets Inc.,
Mizuho Bank, Ltd., MUFG Bank, Ltd., Truist Securities, Inc.
and
Wells Fargo Securities, LLC,
As Joint Lead Arrangers and Joint Bookrunners

and
The Lenders Party Hereto From Time to Time




TABLE OF CONTENTS
          Page
ARTICLE I    Definitions and Accounting Matters    2
Section 1.01    Terms Defined Above    2
Section 1.02    Certain Defined Terms    2
Section 1.03    Types of Loans and Borrowings    5251
Section 1.04    Terms Generally    5251
Section 1.05    Accounting Terms and Determinations; GAAP    5251
Section 1.06    Designation and Conversion of Restricted and Unrestricted Subsidiaries    5352
Section 1.07    Interest Rates; LIBORBenchmark Notification    5453
Section 1.08    Letter of Credit Amounts    5554
Section 1.09    Divisions    5554
ARTICLE II    The Credits    5654
Section 2.01    Revolving Credit Commitments    5654
Section 2.02    Loans and Borrowings    5655
Section 2.03    Requests for Borrowings    5756
Section 2.04    Interest Elections    5857
Section 2.05    Funding of Borrowings    5958
Section 2.06     Termination and Reduction of Aggregate Maximum Revolving Credit Amounts; Increase, Reduction and Termination of Aggregate Elected Commitment Amounts     6059
Section 2.07    Borrowing Base    6463
Section 2.08    Letters of Credit    6867
ARTICLE III    Payments of Principal and Interest; Prepayments; Fees    7473
Section 3.01    Repayment of Loans    7473
Section 3.02    Interest    7473
Section 3.03    Alternate Rate of Interest    7574
Section 3.04    Prepayments    77
Section 3.05    Fees    80
ARTICLE IV    Payments; Pro Rata Treatment; Sharing of Set-offs    8281
Section 4.01    Payments Generally; Pro Rata Treatment; Sharing of Set-offs    8281
Section 4.02    Presumption of Payment by the Borrower    8382
Section 4.03    Certain Deductions by the Administrative Agent    8382
Section 4.04    Payments and Deductions to a Defaulting Lender    83
ARTICLE V    Increased Costs; Break Funding Payments; Taxes; Illegality    86
Section 5.01    Increased Costs    86
Section 5.02    Break Funding Payments    8887
Section 5.03    Taxes    88
Section 5.04    Designation of Different Lending Office; Replacement of Lenders    9392
Section 5.05    Illegality    9493
ARTICLE VI    Conditions Precedent    94
Section 6.01    Effective Date    94
i


Table of Contents
(continued)


Section 6.02    Each Credit Event    98
ARTICLE VII    Representations and Warranties    9998
Section 7.01    Organization; Powers    99
Section 7.02    Authority; Enforceability    99
Section 7.03    Approvals; No Conflicts    10099
Section 7.04    Financial Position; No Material Adverse Effect    10099
Section 7.05    Litigation    100
Section 7.06    Environmental Matters    101100
Section 7.07    Compliance with the Laws and Agreements; No Defaults    101
Section 7.08    Investment Company Act    101
Section 7.09    Taxes    102101
Section 7.10    ERISA    102101
Section 7.11    Disclosure; No Material Misstatements    102
Section 7.12    Insurance    103102
Section 7.13    Restriction on Liens    103102
Section 7.14    Subsidiaries    103
Section 7.15    Location of Business and Offices    103
Section 7.16    Properties; Titles, Etc    104103
Section 7.17    Maintenance of Properties    105104
Section 7.18    Gas Imbalances, Prepayments    105
Section 7.19    Marketing of Production    105
Section 7.20    Swap Agreements    106105
Section 7.21    Use of Loans and Letters of Credit    106105
Section 7.22    Solvency    106
Section 7.23    Anti-Corruption    106
Section 7.24    AML and Sanctions    106
Section 7.25    Accounts    107106
Section 7.26    Security Instruments    107106
Section 7.27    International Operations    108107
Section 7.28    Beneficial Ownership Certification    108107
ARTICLE VIII    Affirmative Covenants    108
Section 8.01    Financial Statements; Other Information    108
Section 8.02    Notices of Material Events    112
Section 8.03    Existence; Conduct of Business    113112
Section 8.04    Payment of Obligations    113
Section 8.05    Performance of Obligations under Loan Documents    113
Section 8.06     Operation and Maintenance of Properties; Subordination of Affiliated Operators’ Liens
     113
Section 8.07    Insurance    114
Section 8.08    Books and Records; Inspection Rights    115114
Section 8.09    Compliance with Laws    115
Section 8.10    Environmental Matters    115
Section 8.11    Further Assurances    116115
Section 8.12    Reserve Reports    116
Section 8.13    Title Information    118117
Section 8.14    Additional Collateral; Additional Guarantors    118
Section 8.15    ERISA Event    119
Section 8.16    Affected Financial Institution    120119
Section 8.17    Accounts    120119
Section 8.18    Use of Proceeds    120
ii


Table of Contents
(continued)


Section 8.19    Minimum Hedging    120
Section 8.20    Post-Closing Covenants    121
ARTICLE IX    Negative Covenants    121
Section 9.01    Financial Covenants    122121
Section 9.02    Debt    122
Section 9.03    Liens    124
Section 9.04    Dividends, Distributions and Redemptions    125
Section 9.05    Investments, Loans and Advances    127
Section 9.06    Nature of Business    129
Section 9.07    Proceeds of Loans    129
Section 9.08    ERISA Compliance    129
Section 9.09    Sale or Discount of Receivables    130
Section 9.10    Mergers, Etc    130
Section 9.11    Disposition of Properties    131
Section 9.12    [Reserved]    132
Section 9.13    Transactions with Affiliates    133
Section 9.14    Negative Pledge Agreements; Dividend Restrictions    133
Section 9.15    Gas Imbalances, Take-or-Pay or Other Prepayments    134
Section 9.16    Swap Agreements    134
Section 9.17    [Reserved]    137
Section 9.18    Subsidiaries    137
Section 9.19    Account Control Agreements    137
Section 9.20    Certain Restrictions with respect to Unrestricted Subsidiaries    138
Section 9.21    Sale and Leaseback Transactions    138
Section 9.22    Organizational Documents; Fiscal Year End; Accounting Changes    138
Section 9.23    Passive Holding Company Status of Holdings    138
Section 9.24    Marketing Activities    139
ARTICLE X    Events of Default; Remedies    140
Section 10.01    Events of Default    140
Section 10.02    Remedies    142
Section 10.03    Disposition of Proceeds    143
Section 10.04    Credit Bidding    144
ARTICLE XI    The Administrative Agent    144
Section 11.01    Appointment; Powers    144
Section 11.02    Duties and Obligations of Administrative Agent    144
Section 11.03    Action by Administrative Agent    145
Section 11.04    Reliance by Administrative Agent    146
Section 11.05    Subagents    146
Section 11.06    Resignation or Removal of Administrative Agent    147
Section 11.07    Administrative Agent and Lenders    148
Section 11.08    No Reliance    148
Section 11.09    Administrative Agent May File Proofs of Claim    149
Section 11.10    The Arrangers    150
Section 11.11    Collateral and Guarantee Matters    150
Section 11.12    Payments in Error    152
ARTICLE XII    Miscellaneous    153
iii


Table of Contents
(continued)


Section 12.01    Notices    153
Section 12.02    Waivers; Amendments    155
Section 12.03    Expenses, Indemnity; Damage Waiver    158
Section 12.04    Successors and Assigns    162
Section 12.05    Survival; Revival; Reinstatement    165
Section 12.06    Counterparts; Integration; Effectiveness    166
Section 12.07    Severability    167
Section 12.08    Right of Setoff    168
Section 12.09    Governing Law; Jurisdiction; Consent to Service of Process    168
Section 12.10    Headings    169
Section 12.11    Confidentiality    169
Section 12.12    Interest Rate Limitation    170
Section 12.13    Exculpation Provisions    171
Section 12.14    Collateral Matters; Swap Agreements    172
Section 12.15    No Third Party Beneficiaries    172
Section 12.16    USA Patriot Act Notice    172
Section 12.17    No Fiduciary Duty    172
Section 12.18    Flood Insurance Provisions    173
Section 12.19    Acknowledgement and Consent to Bail-In of Affected Financial Institutions    173
Section 12.20    [Reserved]    173
Section 12.21    [Reserved]    173
Section 12.22    Amendment and Restatement of Existing Credit Agreement    173
Section 12.23    Certain ERISA Matters    174
Section 12.24    Swap Intercreditor Agreement    175
Section 12.25    Acknowledgment Regarding Any Supported QFCs    175176

iv



ANNEXES, EXHIBITS AND SCHEDULES
Annex I    Schedule of Maximum Revolving Credit Amounts and Elected Commitments
Annex II    Schedule of LC Commitments
Exhibit A    Form of Promissory Note
Exhibit B    Form of Compliance Certificate
Exhibit C    Form of Guaranty and Collateral Agreement
Exhibit D    Form of Assignment and Assumption
Exhibit E    Form of Borrowing Request
Exhibit F    Form of Interest Election Request
Exhibit G    Form of Reserve Report Certificate
Exhibit H    Form of Solvency Certificate
Exhibit I-1    Form of U.S. Tax Compliance Certificate (For Non-U.S. Lenders That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Exhibit I-2    Form of U.S. Tax Compliance Certificate (For Non-U.S. Participants That Are Not Partnerships For U.S. Federal Income Tax Purposes)
Exhibit I-3    Form of U.S. Tax Compliance Certificate (For Non-U.S. Participants That
Are Partnerships For U.S. Federal Income Tax Purposes)
Exhibit I-4    Form of U.S. Tax Compliance Certificate (For Non-U.S. Lenders That
Are Partnerships For U.S. Federal Income Tax Purposes)
Exhibit J    Form of Prepayment/Cancellation Notice
Exhibit K    Form of Elected Commitment Increase Agreement
Exhibit L    Form of Additional Lender Agreement
Exhibit M    Form of Subordinated Intercompany Note


Schedule 1.02(a)    Existing Letters of Credit
Schedule 1.02(b)    Permitted Holders
Schedule 1.02(c)    Specified Swap Agreements
Schedule 7.05    Litigation
Schedule 7.14    Subsidiaries and Partnerships; Location of Businesses and Offices
Schedule 7.18    Gas Imbalances
Schedule 7.19    Marketing Contracts
Schedule 7.20    Swap Agreements
Schedule 7.25    Deposit Accounts
Schedule 7.26    Mortgage Jurisdictions
Schedule 8.20    Post-Closing Covenants
Schedule 9.03    Closing Date Liens
Schedule 9.05    Closing Date Investments
Schedule 9.13    Closing Date Affiliate Transaction
Schedule 12.01    Notice Addresses

v




THIS THIRD AMENDED AND RESTATED CREDIT AGREEMENT, dated as of October 14, 2021, is among Gulfport Energy Operating Corporation, a Delaware corporation (the “Borrower”); Gulfport Energy Corporation, a Delaware corporation (“Holdings”); each of the Lenders from time to time party hereto; and JPMorgan Chase Bank, N.A. (in its individual capacity, “JPMorgan”), as administrative agent for the Lenders (in such capacity, together with its successors in such capacity, the “Administrative Agent”).
R E C I T A L S
A.WHEREAS, The Bank of Nova Scotia, in its capacity as administrative agent for the lenders thereunder (in such capacity, the “Existing Administrative Agent”) and as the issuing bank in respect of letters of credit issued thereunder (in such capacity, the “Existing Issuing Bank”), and other financial institutions named and defined therein as lenders (the “Existing Lenders” and each an “Existing Lender”) entered into that certain Second Amended and Restated Credit Agreement, dated as of May 17, 2021 (as amended, restated, amended and restated, supplemented or otherwise modified from time to time prior to the Effective Date, the “Existing Credit Agreement”), which provided for a term loan in the amount of $180,000,000 and a revolving credit facility offering loans in a maximum principal amount at any one time outstanding of $1,320,000,000 or such lesser amount as therein provided (collectively, the “Existing Facilities”).
B.WHEREAS, pursuant to the terms of that certain Assignment of Secured Indebtedness and Authorization to Assign Liens dated as of the date hereof, by and among the Borrower, the Existing Lenders, the Existing Administrative Agent, the Existing Issuing Bank, the Lenders, the Administrative Agent and the other parties thereto (the “Assignment of Secured Indebtedness”), the Existing Lenders have sold and assigned, and the Lenders have purchased and assumed, all of the outstanding loans and credit extensions outstanding under the Existing Credit Agreement, together with the benefit of all of the related security documents and liens, as more particularly set forth therein, and have authorized the Existing Administrative Agent to assign and transfer all of the Liens securing obligations under the Existing Credit Agreement to the Administrative Agent; and
C.WHEREAS, (a) the Borrower has requested that loans outstanding under the Existing Facilities shall, on the Effective Date of this Agreement, be continued, amended, renewed, restated and converted into revolving Loans under this Agreement (but shall not be deemed to be repaid or terminated), all letters of credit issued and outstanding under the Existing Credit Agreement shall be Letters of Credit hereunder and all Liens securing loans and other obligations of the Borrower and the Guarantors pursuant to the Existing Facilities shall be continued and renewed and shall remain in full force and effect to secure the Secured Obligations, (b) the Borrower has requested that the Lenders extend credit in the form of Loans made available to the Borrower and at any time and from time to time after the Effective Date not to exceed their respective Revolving Credit Commitments, and (c) the Borrower has requested that the Issuing Banks issue Letters of Credit at any time and from time to time prior to the LC Maturity Date, in an aggregate stated amount at any time outstanding not in excess of the LC Commitment.




D.WHEREAS, the Revolving Credit Commitment of each Lender shall be as set forth opposite such Lender’s name on Annex I attached hereto.
E.NOW, THEREFORE, in consideration of the mutual covenants and agreements herein contained herein and of the loans, extensions of credit and commitments hereinafter referred to, the parties hereto agree as follows:
ARTICLE I

Definitions and Accounting Matters
Section 1.01Terms Defined Above. As used in this Agreement, each capitalized term defined above has the meaning indicated above.
Section 1.02Certain Defined Terms. As used in this Agreement, the following capitalized and other terms have the meanings specified below:
ABR”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Alternate Base Rate.
Acceptable Hedge Transactions” means (i) (A) swap transactions covering identical volumes of natural gas and identical months with strike prices at the relevant Strip Price at the time of the transaction, (B) deferred premium purchased puts for volumes of natural gas with a strike price not less than 15% below the relevant Strip Price at the time of the transaction or (C) collars (other than “three-way collars”) covering identical volumes of natural gas and identical months with strike prices establishing a floor no lower than 15% below the relevant Strip Price at the time of the transaction and (ii) any other swap transactions constituting swaps or two-way collars having swapped price floors reasonably acceptable to the Administrative Agent, including, for the avoidance of doubt, all Swap Agreements in existence as of the Effective Date and any novations thereof on or after the Effective Date or restructurings thereof that do not increase the Borrower’s net economic exposure to the relevant commodity; provided that three-way collars shall not constitute Acceptable Hedge Transactions.
Account Control Agreement” means, as to any Deposit Account, Commodity Account or Securities Account of any Credit Party (in each case, other than an Excluded Account), an agreement or agreements in form and substance reasonably acceptable to the Administrative Agent among such Credit Party owning such Deposit Account, Commodity Account or Securities Account, the Administrative Agent and, as applicable, the depositary bank, commodity intermediary, securities intermediary, securities broker or any other Person with respect thereto, which agreement or agreements shall provide a first-priority perfected Lien (subject to Excepted Liens of the type described in clause (e) of the definition thereof) in favor of the Administrative Agent for the benefit of the Lenders in such Deposit Account, Commodity Account or Securities Account.
Accounting Changes” means changes in accounting principles required by the promulgation of any rule, regulation, pronouncement or opinion by the Public Company Accounting Oversight Board, the Financial Accounting Standards Board of the American Institute of Certified Public Accountants or, if applicable, the Securities and Exchange Commission (or successors thereto, or agencies with similar functions).
“Acquisition Hedges” has the meaning assigned to such term in Section 9.16(a)(ii).
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“Additional Lender” has the meaning assigned to such term in Section 2.06(c)(i).
“Additional Lender Agreement” has the meaning given to such term in Section 2.06(c)(ii)(G).
“Adjusted Daily Simple SOFR” means an interest rate per annum equal to (a) the Daily Simple SOFR, plus (b) 0.10%; provided that if the Adjusted Daily Simple SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
Adjusted LIBOTerm SOFR Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, an interest rate per annum (rounded upwards, if necessary, to the next 1/100 of 1%) equal to (a) the LIBOTerm SOFR Rate for such Interest Period multiplied by (b) the Statutory Reserve Rate, plus (b) 0.10%; provided that if the Adjusted Term SOFR Rate as so determined would be less than the Floor, such rate shall be deemed to be equal to the Floor for the purposes of this Agreement.
Administrative Agent” has the meaning assigned to such term in the preamble.
Administrative Questionnaire” means an Administrative Questionnaire in a form supplied by the Administrative Agent.
Advance Payment Contract” means any contract whereby any Credit Party either receives or becomes entitled to receive (either directly or indirectly) any payment (an “Advance Payment”) to be applied toward the purchase price of Hydrocarbons produced or to be produced from Hydrocarbon Interests owned by any Credit Party and which Advance Payment is paid or to be paid in advance of actual delivery of such production to or for the account of the purchaser regardless of such production; provided that inclusion of the standard “take or pay” provision in any gas sales or purchase contract or any other similar contract shall not, in and of itself, constitute such contract as an Advance Payment Contract for the purposes hereof.
Affected Financial Institution” means (a) any EEA Financial Institution or (b) any UK Financial Institution.
Affected Loans” has the meaning assigned to such term in Section 5.05.
Affiliate” means, with respect to a specified Person, another Person that directly, or indirectly through one or more intermediaries, Controls or is Controlled by or is under common Control with the Person specified. Solely for purposes of this definition, any Person that owns directly or indirectly 10% or more of the Equity Interests having ordinary voting power for the election of directors or other governing body of a Person (other than as a limited partner of such Person) will be deemed to “control” such other Person.
Agent Parties” has the meaning assigned to such term in Section 12.01(d).
Aggregate Elected Commitment Amounts” at any time shall equal the sum of the Elected Commitments, as the same may be increased, reduced or terminated pursuant to Section 2.06. As of the Effective Date, the Aggregate Elected Commitment Amounts are $700,000,000.
Aggregate LC Commitment” at any time means $175,000,000. The Aggregate LC Commitment may be reduced in accordance with Section 2.08(k).
Aggregate Maximum Revolving Credit Amounts” as of any date of determination, shall equal the sum of all of the Lenders’ Maximum Revolving Credit Amounts, as the same may be
3




reduced, increased or terminated pursuant to Section 2.06. As of the Effective Date, the Aggregate Maximum Revolving Credit Amounts of all of the Lenders is $1,500,000,000.
Aggregate Revolving Credit Commitment” means, on any date of determination, the aggregate amount of the Revolving Credit Commitments.
Agreement” means this Third Amended and Restated Credit Agreement, as the same may from time to time be amended, restated, amended and restated, supplemented or otherwise modified.
Alternate Base Rate” means, for any day, a rate per annum equal to the highest of (a) the Prime Rate in effect on such day, (b) the NYFRB Rate in effect on such day plus ½ of 1%, and (c) the Adjusted LIBOTerm SOFR Rate for a one month Interest Period beginning on such day (or if such day is not aas published two U.S. Government Securities Business Day, the immediately preceding Business Day) prior to such day plus 1%; provided that, for the purpose of this definition, the Adjusted LIBOTerm SOFR Rate for any day shall be based on the LIBO Screen Rate (or if the LIBO Screen Rate is not available for such one-month Interest Period, the Interpolated Rate)Term SOFR Reference Rate at approximately 11:00 a.m., London time,5:00 a.m. Chicago time on such day (or the immediately preceding Business Day if such day is not a Business Dayany amended publication time for the Term SOFR Reference Rate, as specified by the CME Term SOFR Administrator in the Term SOFR Reference Rate methodology). Any change in the Alternate Base Rate due to a change in the Prime Rate, the NYFRB Rate or the Adjusted LIBOTerm SOFR Rate shall be effective from and including the effective date of such change in the Prime Rate, the NYFRB Rate or the Adjusted LIBOTerm SOFR Rate, respectively. If the Alternate Base Rate is being used as an alternate rate of interest pursuant to Section 3.03 (for the avoidance of doubt, only until the Benchmark Replacement has been determined pursuant to Section 3.03), then the Alternate Base Rate shall be the greater of clauses (a) and (b) above and shall be determined without reference to clause (c) above. Notwithstanding anything in this definition to the contrary, the Alternate Base Rate” shall be deemed not to as determined pursuant to the foregoing would be less than one percent (1.0%) at any time, such rate shall be deemed to be one percent (1.0%) for purposes of this Agreement.
Ancillary Document” has the meaning assigned to such term in Section 12.06(d).
AML Laws” means all laws, rules, and regulations of any jurisdiction applicable to any Lender, the Borrower, the Borrower’s Subsidiaries or any other Credit Party or its Subsidiaries from time to time concerning or relating to anti-money laundering.
Annualized EBITDAX” means, for the purposes of calculating EBITDAX for each Reference Period ending on or before March 31, 2022, the Borrower’s actual EBITDAX for such
4




Reference Period multiplied by the factor determined for such Reference Period in accordance with the table below:
Reference PeriodFactor
The one-quarter period ending on September 30, 20214
The two-quarter period ending on December 31, 20212
The three-quarter period ending on March 31, 20224/3

Anti-Corruption Laws” means all laws, rules, and regulations of the United States or any other jurisdiction applicable to the Borrower, the Borrower’s Subsidiaries or any other Credit Party or its Subsidiaries from time to time concerning or relating to bribery or corruption.
Applicable Margin” means, for any day, with respect to any ABR Loan or Eurodollar, Term Benchmark Loan or RFR Loan, or with respect to the Commitment Fee Rate, as the case may be, the rate per annum set forth in the Borrowing Base Utilization Grid below based upon the Borrowing Base Utilization Percentage then in effect:
Borrowing Base Utilization Grid
Borrowing Base Utilization Percentage≤25.0%>25.0% ≤50.0%
>50.0%
≤ 75.0%
>75.0%
≤90.0%
>90.0%
ABR Loans1.75%2.00%2.25%2.50%2.75%
EurodollarTerm Benchmark Loans and RFR Loans
2.75%3.00%3.25%3.50%3.75%
Commitment Fee Rate0.50%0.50%0.50%0.50%0.50%

Each change in the Applicable Margin for Loans shall apply during the period commencing on the effective date of such change in the Borrowing Base Utilization Percentage and ending on the date immediately preceding the effective date of the next such change, provided, that if at any time the Borrower fails to deliver a Reserve Report pursuant to Section 8.12(a), then until delivery of such Reserve Report, the “Applicable Margin” with respect to Loans shall mean the rate per annum set forth on the grid when the Borrowing Base Utilization Percentage is at its highest level.
Applicable Percentage” means, with respect to any Lender, at any time, the fraction expressed as a percentage obtained by dividing (a) the sum of such Lender’s Revolving Credit Commitment, if any, by (b) the Aggregate Revolving Credit Commitments; provided that for
5




purposes of this definition, if the Revolving Credit Commitments are terminated pursuant to this Agreement, then each Lender’s Revolving Credit Commitment and the Aggregate Revolving Credit Commitments shall be the amounts thereof immediately prior to giving effect to any such termination of such Revolving Credit Commitments. The Applicable Percentages of the Lenders as of the Effective Date are set forth on Annex I.
Approved Counterparty” means (a) any Lender or any Affiliate of a Lender, including with respect to any Swap Obligations existing as of the Effective Date, (b) any other Person whose long term senior unsecured debt rating is A-/A3 by S&P or Moody’s (or their equivalent) or higher (or such counterparty’s obligations under any Swap Agreement have been guaranteed by an entity with such ratings), (c) any Existing Lender (or any Affiliate thereof) that is not a Lender, with respect to any Swap Obligations existing as of the Effective Date and, in each case, any and all successors thereto and (d) any other Secured Swap Party that is not described in the foregoing clause (a) through (c).
Approved Fund” means any Person (other than a natural person) that is engaged in making, purchasing, holding or investing in bank loans and similar extensions of credit in the ordinary course of its business and that is administered or managed by (a) a Lender, (b) an Affiliate of a Lender or (c) an entity or an Affiliate of an entity that administers or manages a Lender.
Approved Petroleum Engineers” means (a) Cawley, Gillespie & Associates, Inc., (b) Netherland, Sewell & Associates, Inc., (c) Ryder Scott Company Petroleum Consultants, L.P., and (d) any other independent petroleum engineers reasonably acceptable to the Administrative Agent.
Arrangers” means JPMorgan Chase Bank, N.A., Citizens Bank, N.A, Fifth Third Bank National Association, KeyBanc Capital Markets Inc., Mizuho Bank, Ltd., MUFG Bank, Ltd., Truist Securities, Inc., and Wells Fargo Securities, LLC, each in its capacity as a joint lead arranger and joint bookrunner.
Assignment and Assumption” means an assignment and assumption entered into by a Lender and an assignee (with the consent of any party whose consent is required by Section 12.04(b)), and accepted by the Administrative Agent, in the form of Exhibit D or any other form approved by the Administrative Agent.
Assignment of Secured Indebtedness” has the meaning assigned to such term in Recital B.
Availability Period” means the period from and including the Effective Date to but excluding the Termination Date.
Available Free Cash Flow” means, as of any time of calculation thereof, the amount equal to: (a) Free Cash Flow as of the last day of the most recently ended Measurement Period for which financial statements have been delivered pursuant to Section 8.01(a) or Section 8.01(b), minus (b) the sum of the aggregate amount of Investments made under Section 9.05(g), (i), (k), (l), minus (c) the sum of the aggregate amount of Restricted Payments made under Section 9.04(a)(iv)-(viiviii) that, in the case of clauses (b) and (c), have been made in cash since the first day of the applicable Measurement Period through and including the time of calculation and were not financed with the proceeds of any substantially concurrent (with sixty (60) days being deemed substantially concurrent) (x) issuance of Equity Interests or (y) incurrence of long-term Debt for borrowed money permitted by the Loan Documents (other than the proceeds of a Borrowing or LC Disbursement).
6




Available Tenor” means, as of any date of determination and with respect to the then-current Benchmark, as applicable, any tenor for such Benchmark (or component thereof) or payment period for interest calculated with reference to such Benchmark (or component thereof), as applicable, that is or may be used for determining the length of an Interest Period for any term rate or otherwise, for determining any frequency of making payments of interest calculated pursuant to this Agreement as of such date and not including, for the avoidance of doubt, any tenor for such Benchmark that is then-removed from the definition of “Interest Period” pursuant to clause (fe) of Section 3.03.
Bail-In Action” means the exercise of any Write-Down and Conversion Powers by the applicable Resolution Authority in respect of any liability of an Affected Financial Institution.
Bail-In Legislation” means, (a) with respect to any EEA Member Country implementing Article 55 of Directive 2014/59/EU of the European Parliament and of the Council of the European Union, the implementing law, regulation rule or requirement for such EEA Member Country from time to time which is described in the EU Bail-In Legislation Schedule and (b) with respect to the United Kingdom, Part I of the United Kingdom Banking Act 2009 (as amended from time to time) and any other law, regulation or rule applicable in the United Kingdom relating to the resolution of unsound or failing banks, investment firms or other financial institutions or their affiliates (other than through liquidation, administration or other insolvency proceedings).
Bank Price Deck” means the Administrative Agent’s “base case” forward curve for oil, natural gas and other Hydrocarbons as of the most recent Proposed Borrowing Base Notice and furnished to the Borrower.
Bankruptcy Code” shall mean Title 11 of the United States Code entitled “Bankruptcy”, as now and hereafter in effect, or any successor statute.
Bankruptcy Event” means, with respect to any Person, such Person becomes the subject of a bankruptcy or insolvency proceeding, or has had a receiver, conservator, trustee, administrator, custodian, assignee for the benefit of creditors or similar Person charged with the reorganization or liquidation of its business appointed for it, or, in the good faith determination of the Administrative Agent, has taken any action in furtherance of, or indicating its consent to, approval of, or acquiescence in, any such proceeding or appointment; provided that a Bankruptcy Event shall not result solely by virtue of any ownership interest, or the acquisition of any ownership interest, in such Person by a Governmental Authority or instrumentality thereof; provided, further, that such ownership interest does not result in or provide such Person with immunity from the jurisdiction of courts within the United States or from the enforcement of judgments or writs of attachment on its assets or permit such Person (or such Governmental Authority or instrumentality) to reject, repudiate, disavow or disaffirm any contracts or agreements made by such Person.
Bankruptcy Exit Date” means May 17, 2021.
Benchmark” means, initially, the LIBOwith respect to any (i) RFR Loan, the Daily Simple SOFR or (ii) Term Benchmark Loan, the Term SOFR Rate; provided that if a Benchmark Transition Event, a Term SOFR Transition Event, an Early Opt-in Election or an Other Benchmark Rate Election, as applicable, and itsand the related Benchmark Replacement Date have occurred with respect to the LIBODaily Simple SOFR or Term SOFR Rate, as applicable, or the then-current Benchmark, then “Benchmark” means the applicable Benchmark Replacement to the extent that such Benchmark Replacement has replaced such prior benchmark rate pursuant to clause (b) or clause (c) of Section 3.03.
7




Benchmark Replacement” means, for any Available Tenor, the first alternative set forth in the order below that can be determined by the Administrative Agent for the applicable Benchmark Replacement Date; provided that, in the case of an Other Benchmark Rate Election, “Benchmark Replacement” shall mean the alternative set forth in (3) below:
(1)    the sum of: (a) Term SOFR and (b) the related Benchmark Replacement Adjustment;
(2)    the sum of: (a) Daily Simple SOFR and (b) the related Benchmark Replacement Adjustment;
(3)    “Benchmark Replacement” means, for any Available Tenor, the sum of: (a) the alternate benchmark rate that has been selected by the Administrative Agent and the Borrower as the replacement for the then-current Benchmark for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a replacement benchmark rate or the mechanism for determining such a rate by the Relevant Governmental Body or (ii) any evolving or then-prevailing market convention for determining a benchmark rate as a replacement for the then-current Benchmark for dollar-denominated syndicated credit facilities at such time in the United States and (b) the related Benchmark Replacement Adjustment;
provided that, in the case of clause (1), such Unadjusted Benchmark Replacement is displayed on a screen or other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion; provided further that, in the case of clause (3), when such clause is used to determine the Benchmark Replacement in connection with the occurrence of an Other Benchmark Rate Election, the alternate benchmark rate selected by the Administrative Agent and the Borrower shall be the term benchmark rate that is used in lieu of a LIBOR-based rate in the relevant other dollar-denominated syndicated credit facilities; provided further that, notwithstanding anything to the contrary in this Agreement or in any other Loan Document, upon the occurrence of a Term SOFR Transition Event, and the delivery of a Term SOFR Notice, on the applicable Benchmark Replacement Date the “Benchmark Replacement” shall revert to and shall be deemed to be the sum of (a) Term SOFR and (b) the related Benchmark Replacement Adjustment, as set forth in clause (1) of this definition (subject to the first proviso above).
If the Benchmark Replacement as determined pursuant to clause (1), (2) or (3)the above would be less than the Floor, the Benchmark Replacement will be deemed to be the Floor for the purposes of this Agreement and the other Loan Documents.
Benchmark Replacement Adjustment” means, with respect to any replacement of the then-current Benchmark with an Unadjusted Benchmark Replacement for any applicable Interest Period and Available Tenor for any setting of such Unadjusted Benchmark Replacement:
, the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by (1)    for purposes of clauses (1) and (2) of the definition of “Benchmark Replacement,” the first alternative set forth in the order below that can be determined by the Administrative Agent:
(a)    the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that has been selected or recommended by the Relevant Governmental
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Body for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for the applicable Corresponding Tenor;
(b)    the spread adjustment (which may be a positive or negative value or zero) as of the Reference Time such Benchmark Replacement is first set for such Interest Period that would apply to the fallback rate for a derivative transaction referencing the ISDA Definitions to be effective upon an index cessation event with respect to such Benchmark for the applicable Corresponding Tenor; and
(2)    for purposes of clause (3) of the definition of “Benchmark Replacement,” the spread adjustment, or method for calculating or determining such spread adjustment, (which may be a positive or negative value or zero) that has been selected by thethe Administrative Agent and the Borrower for the applicable Corresponding Tenor giving due consideration to (i) any selection or recommendation of a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement by the Relevant Governmental Body on the applicable Benchmark Replacement Date and/or (ii) any evolving or then-prevailing market convention for determining a spread adjustment, or method for calculating or determining such spread adjustment, for the replacement of such Benchmark with the applicable Unadjusted Benchmark Replacement for dollar-denominated syndicated credit facilities at such time;.
provided that, in the case of clause (1) above, such adjustment is displayed on a screen or other information service that publishes such Benchmark Replacement Adjustment from time to time as selected by the Administrative Agent in its reasonable discretion.
Benchmark Replacement Conforming Changes” means, with respect to any Benchmark Replacement and/or any Term Benchmark Loan, any technical, administrative or operational changes (including changes to the definition of “Alternate Base Rate,” the definition of “Business Day,” the definition of “U.S. Government Securities Business Day,” the definition of “Interest Period,” timing and frequency of determining rates and making payments of interest, timing of borrowing requests or prepayment, conversion or continuation notices, length of lookback periods, the applicability of breakage provisions, and other technical, administrative or operational matters) that the Administrative Agent, in consultation with the Borrower, decides may be appropriate to reflect the adoption and implementation of such Benchmark Replacement and to permit the administration thereof by the Administrative Agent in a manner substantially consistent with market practice (or, if the Administrative Agent reasonably decides that adoption of any portion of such market practice is not administratively feasible or if the Administrative Agent determines that no market practice for the administration of such Benchmark Replacement exists, in such other manner of administration as the Administrative Agent reasonably, in consultation with the Borrower, decides is reasonably necessary in connection with the administration of this Agreement and the other Loan Documents).
Benchmark Replacement Date” means, with respect to any Benchmark, the earliestearlier to occur of the following events with respect to such then-current Benchmark:
(1)    in the case of clause (1) or (2) of the definition of “Benchmark Transition Event,” the later of (a) the date of the public statement or publication of information referenced therein and (b) the date on which the administrator of such Benchmark (or the published component used in the calculation thereof) permanently or indefinitely ceases to provide all Available Tenors of such Benchmark (or such component thereof); or
(2)    in the case of clause (3) of the definition of “Benchmark Transition Event,” the first date on which such Benchmark (or the published component used in the
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calculation thereof) has been determined and announced by the regulatory supervisor for the administrator of such Benchmark (or such component thereof) to be no longer representative; provided, that such non-representativeness will be determined by reference to the most recent statement or publication referenced in such clause (c3) and even if any Available Tenor of such Benchmark (or such component thereof) continues to be provided on such date;.
(3)    in the case of a Term SOFR Transition Event, the date that is thirty (30) days after the date a Term SOFR Notice is provided to the Lenders and the Borrower pursuant to Section 3.03(c); or
(4)    in the case of an Early Opt-in Election or an Other Benchmark Rate Election, the sixth (6th) Business Day after the date notice of such Early Opt-in Election or Other Benchmark Rate Election, as applicable, is provided to the Lenders, so long as the Administrative Agent has not received, by 5:00 p.m. (New York City time) on the fifth (5th) Business Day after the date notice of such Early Opt-in Election or Other Benchmark Rate Election, as applicable, is provided to the Lenders, written notice of objection to such Early Opt-in Election or Other Benchmark Rate Election, as applicable, from Lenders comprising the Majority Lenders.
For the avoidance of doubt, (i) if the event giving rise to the Benchmark Replacement Date occurs on the same day as, but earlier than, the Reference Time in respect of any determination, the Benchmark Replacement Date will be deemed to have occurred prior to the Reference Time for such determination and (ii) the “Benchmark Replacement Date” will be deemed to have occurred in the case of clause (1) or (2) with respect to any Benchmark upon the occurrence of the applicable event or events set forth therein with respect to all then-current Available Tenors of such Benchmark (or the published component used in the calculation thereof).
Benchmark Transition Event” means, with respect to any Benchmark, the occurrence of one or more of the following events with respect to such then-current Benchmark:
(1) a public statement or publication of information by or on behalf of the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that such administrator has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof), permanently or indefinitely, provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof);
(2) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof), the Federal Reserve Board, the NYFRB, the CME Term SOFR Administrator, an insolvency official with jurisdiction over the administrator for such Benchmark (or such component), a resolution authority with jurisdiction over the administrator for such Benchmark (or such component) or a court or an entity with similar insolvency or resolution authority over the administrator for such Benchmark (or such component), in each case, which states that the administrator of such Benchmark (or such component) has ceased or will cease to provide all Available Tenors of such Benchmark (or such component thereof) permanently or indefinitely; provided that, at the time of such statement or publication, there is no successor administrator that will continue to provide any Available Tenor of such Benchmark (or such component thereof); or
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(3) a public statement or publication of information by the regulatory supervisor for the administrator of such Benchmark (or the published component used in the calculation thereof) announcing that all Available Tenors of such Benchmark (or such component thereof) are no longer, or as of a specified future date will no longer be, representative.
For the avoidance of doubt, a “Benchmark Transition Event” will be deemed to have occurred with respect to any Benchmark if a public statement or publication of information set forth above has occurred with respect to each then-current Available Tenor of such Benchmark (or the published component used in the calculation thereof).
Benchmark Unavailability Period” means, with respect to any Benchmark, the period (if any) (x) beginning at the time that a Benchmark Replacement Date pursuant to clauses (1) or (2) of that definition has occurred if, at such time, no Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 3.03 and (y) ending at the time that a Benchmark Replacement has replaced such then-current Benchmark for all purposes hereunder and under any Loan Document in accordance with Section 3.03.
Beneficial Ownership Certification” means a certification regarding beneficial ownership as required by the Beneficial Ownership Regulation, in a substantially similar form and substance to the form of Certification Regarding Beneficial Owners of Legal Entity Customers published jointly, in May 2018, by the Loan Syndications and Trading Association and the Securities Industry and Financial Markets Association.
Beneficial Ownership Regulation” means 31 C.F.R. § 1010.230.
Benefit Plan” means any of (a) an “employee benefit plan” (as defined in ERISA) that is subject to Title I of ERISA, (b) a “plan” as defined in and subject to Section 4975 of the Code or (c) any Person whose assets include (for purposes of ERISA Section 3(42) or otherwise for purposes of Title I of ERISA or Section 4975 of the Code) the assets of any such “employee benefit plan” or “plan”.
“BHC Act Affiliate” of a party means an “affiliate” (as such term is defined under, and interpreted in accordance with, 12 U.S.C. 1841(k)) of such party.
Borrower” has the meaning assigned to such term in the preamble.
Borrowing” means Loans of the same Type, made, converted or continued on the same date and, in the case of EurodollarTerm Benchmark Loans, as to which a single Interest Period is in effect.
Borrowing Base” means at any time an amount equal to the amount determined in accordance with Section 2.07, as the same may be adjusted from time to time pursuant to Section 2.07(e), Section 2.07(f) or Section 8.13(c).
Borrowing Base Deficiency” occurs if at any time the total Revolving Credit Exposures exceed the Borrowing Base then in effect. The amount of any Borrowing Base Deficiency is the amount by which the total Revolving Credit Exposures exceed the Borrowing Base then in effect.
Borrowing Base Properties” means the proved Oil and Gas Properties of the Borrower and its Restricted Subsidiaries included in the most recently delivered Reserve Report hereunder.
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Borrowing Base Utilization Percentage” means, as of any day, the fraction expressed as a percentage, the numerator of which is the sum of the Revolving Credit Exposures, and the denominator of which is the lesser of (a) the Borrowing Base in effect on such day and (b) the Aggregate Elected Commitment Amounts in effect on such day.
Borrowing Request” means a request by the Borrower for a Borrowing in accordance with Section 2.03 in substantially the form of Exhibit E.
Business Day” means any day that is not a Saturday, Sunday or other day on which commercial banks in New York City or Houston, Texas are authorized or required by law to remain closed; and if such day relates to a Borrowing or continuation of, a payment or prepayment of principal of or interest on, or a conversion of or into, or the Interest Period for, a Eurodollar Loan or a notice by the Borrower with respect to any such Borrowing or continuation, payment, prepayment, conversion or Interest Period, any day which is also a day on which banks are open for dealings in dollar deposits in the London interbank market., any day (other than a Saturday or a Sunday) on which banks are open for business in New York City, Chicago or Houston, Texas; provided that, (a) in relation to RFR Loans and any interest rate settings, fundings, disbursements, settlements or payments of any such RFR Loan, or any other dealings of such RFR Loan, any such day that is only an U.S. Government Securities Business Day and (b) in relation to any interest rate setting with respect to Term Benchmark Loans, any such day that is only an U.S. Government Securities Business Day.
Capital Leases” means, in respect of any Person, all leases which shall have been, or should have been, in accordance with GAAP, recorded as capital leases on the balance sheet of the Person liable (whether contingent or otherwise) for the payment of rent thereunder, provided that all obligations of any Person that are or would have been treated as operating leases for purposes of GAAP prior to the issuance by the Financial Accounting Standards Board on February 25, 2016 of an Accounting Standards Update (the “ASU”) shall continue to be accounted for as operating leases for purposes of all financial definitions and calculations for purpose of this Agreement (whether or not such operating lease obligations were in effect on such date) notwithstanding the fact that such obligations are required in accordance with the ASU (on a prospective or retroactive basis or otherwise) to be treated as capitalized lease obligations in the financial statements to be delivered pursuant to Section 8.01.
Capital Lease Obligations” shall mean, with respect to any Person, the obligations of such Person to pay rent or other amounts under any Capital Lease, any lease entered into as part of any Sale and Leaseback Transaction or any Synthetic Lease, or a combination thereof, which obligations are (or would be, if such Synthetic Lease or other lease were accounted for as a Capital Lease) required to be classified and accounted for as Capital Leases on a balance sheet of such person under GAAP, and the amount of such obligations shall be the capitalized amount thereof (or the amount that would be capitalized, if such Synthetic Lease or other lease were accounted for as a Capital Lease) determined in accordance with GAAP.
Cash Equivalents” means (a) marketable direct obligations issued by, or unconditionally guaranteed by, any state, territory or commonwealth of the United States Government or issued by any agency thereof and backed by the full faith and credit of the United States, in each case maturing within one year from the date of acquisition; (b) deposit accounts or deposits maturing within one year from the date of acquisition thereof with, including certificates of deposit, time deposits, Eurodollareurodollar time deposits or overnight bank deposits having maturities of twelve (12) months or less from the date of acquisition issued by any Lender or by any commercial bank organized under the laws of the United States of any state thereof having combined capital and surplus of not less than $500,000,000; (c) commercial paper of an issuer rated at least A-1 by S&P or P-1 by Moody’s, or carrying an equivalent rating by a nationally recognized rating agency, if both of the two named rating agencies cease publishing ratings of
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commercial paper issuers generally, and maturing within 12 months from the date of acquisition; (d) repurchase obligations of any Lender or of any commercial bank satisfying the requirements of clause (b) of this definition, having a term of not more than thirty (30) days, with respect to securities issued or fully guaranteed or insured by the United States government; or (e) money market or other mutual funds substantially all of whose assets comprise securities of the type described in clauses (a) through (d) above.
Cash Management Agreement” means any agreement to provide cash management services, including, but not limited to, treasury, depository, overdraft, credit or debit card, electronic funds transfer and other cash management services.
Cash Receipts” means all cash received by or on behalf of any Credit Party or any of the Restricted Subsidiaries, including without limitation: (a) any amounts payable under or in connection with any Oil and Gas Properties; (b) cash representing operating revenue earned or to be earned by any Credit Party or any of the Restricted Subsidiaries; (c) proceeds from Loans; and (d) any other cash received by any Credit Party or any of the Restricted Subsidiaries from whatever source (including, without limitation, amounts received in respect of the Liquidation of any Swap Agreement).
Casualty Event” means any loss, casualty or other insured damage to, or any nationalization, taking under power of eminent domain or by condemnation or similar proceeding of, any Property of the Credit Parties or the Restricted Subsidiaries.
Change in Control” means the occurrence of the following events: (a) the acquisition of ownership, directly or indirectly, beneficially or of record, by any Person or group (within the meaning of the Exchange Act and the rules of the SEC thereunder as in effect on the date hereof) other than the Permitted Holders, of Equity Interests so that such Person or group owns thirty-five percent (35%) or more of the aggregate ordinary voting power represented by the issued and outstanding Equity Interests of Holdings, (b) Holdings shall cease to own and control directly or indirectly one hundred percent (100%) of the Equity Interests of the Borrower, (c) the Borrower shall cease to own and control directly or indirectly one hundred percent (100%) of the Equity Interests of any Guarantor, except pursuant to a transaction permitted by Section 9.10 or Section 9.11, (d) occupation of a majority of the seats (other than vacant seats) on the board of directors of Holdings by Persons who were neither (i) nominated, appointed or approved for consideration by shareholders for election by the members of the board of directors of Holdings or (ii) appointed by directors so nominated, appointed or approved, or (e) any “change in control” under any documents governing any Material Debt.
Change in Law” means the occurrence after the date of this Agreement or, with respect to any Lender, such later date on which such Lender becomes a party to this Agreement of (a) the adoption of or taking effect of any law, rule, regulation or treaty, (b) any change in any law, rule, regulation or treaty or in the interpretation, implementation or application thereof by any Governmental Authority or (c) compliance by any Lender or any Issuing Bank (or, for purposes of Section 5.01(b), by any lending office of such Lender or by such Lender’s or such Issuing Bank’s holding company, if any) with any request, guideline or directive (whether or not having the force of law) of any Governmental Authority made or issued after the date of this Agreement; provided that, notwithstanding anything herein to the contrary, (x) the Dodd-Frank Wall Street Reform and Consumer Protection Act and all requests, rules, guidelines, requirements or directives thereunder or issued in connection therewith (whether or not having the force of law) or in implementation thereof and (y) all requests, rules, guidelines or directives promulgated by the Bank for International Settlements, the Basel Committee on Banking Supervision (or any successor or similar authority) or the United States or foreign regulatory authorities, in each case pursuant to Basel III, shall be deemed to be a “Change in Law,” regardless of the date enacted, adopted, promulgated, issued or implemented.
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“CME Term SOFR Administrator” means CME Group Benchmark Administration Limited as administrator of the forward-looking term Secured Overnight Financing Rate (SOFR) (or a successor administrator).
Code” means the Internal Revenue Code of 1986, as amended from time to time, and any successor statute.
Collateral” is a collective reference to “Collateral” as defined in the Guaranty and Collateral Agreement, “Mortgaged Properties” as defined in each Mortgage and all other collateral as provided for pursuant to any other Security Instrument. For the avoidance of doubt, Excluded Assets shall not be Collateral.
Commitment Fee Rate” has the meaning assigned to such term in the definition of Applicable Margin.
Commodity Account” has the meaning assigned to such term in the UCC.
Commodity Exchange Act” means the Commodity Exchange Act (7 U.S.C. § 1 et seq.), as amended from time to time, and any successor statute and any regulations promulgated thereunder.
Connection Income Taxes” means Other Connection Taxes that are imposed on or measured by net income (however denominated) or that are franchise Taxes or branch profits Taxes.
Consolidated Net Income” means with respect to the Borrower and its Consolidated Restricted Subsidiaries, for any period, the net income (or loss) of the Borrower and its Consolidated Restricted Subsidiaries for such period determined on a consolidated basis in accordance with GAAP; provided, that there shall be excluded from such net income (to the extent otherwise included therein) the following (without duplication): (a) the income of any Person that is not a Subsidiary of the Borrower, or is an Unrestricted Subsidiary, or that is accounted for by the equity method of accounting; provided that Consolidated Net Income shall be increased by the amount of dividends or distributions or other payments that are actually paid in cash or Cash Equivalents (or to the extent subsequently converted into cash or Cash Equivalents) to the Borrower or any of its Consolidated Restricted Subsidiaries by such Person in such period; (b) the net income (but not loss) during such period of any Consolidated Restricted Subsidiary to the extent that the declaration or payment of dividends or similar distributions or transfers or loans by that Consolidated Restricted Subsidiary is not at the time permitted by operation of the terms of its charter or any agreement, instrument, or Governmental Requirement applicable to such Consolidated Restricted Subsidiary or is otherwise restricted or prohibited; (c) the net income (or deficit) of any Person accrued prior to the date it becomes a Consolidated Restricted Subsidiary or is merged into or consolidated with the Borrower or any of its Consolidated Restricted Subsidiaries, (d) any after-tax effect of any extraordinary, non-recurring or unusual items (including gains or losses and all fees and expenses relating thereto) for such period; (e) any non-cash gains, losses, or adjustments under FASB ASC Topic 815 as a result of changes in the fair market value of derivatives; (f) any gains or losses attributable to write-ups or write-downs of assets, including ceiling test write-downs; (g) the cumulative effect of a change in accounting principles and changes as a result of the adoption or modification of accounting policies during such period to the extent included in Consolidated Net Income; and (h) any net after tax effect on income (loss) from Dispositions (other than Hydrocarbons produced in the ordinary course of business) or Liquidations of Swap Agreements (other than such Liquidations as required pursuant to Section 9.16(a)(ii), Section 9.16(b) or Section 9.16(c)).
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Consolidated Restricted Subsidiaries” means any Restricted Subsidiaries that are Consolidated Subsidiaries.
Consolidated Subsidiary” means each Subsidiary of the Borrower (whether now existing or hereafter created or acquired) the financial statements of which are (or should be) consolidated with the financial statements of the Borrower in accordance with GAAP.
Consolidated Total Assets” shall mean, as of any date of determination, the amount that would, in conformity with GAAP, be set forth opposite the caption “total assets” (or any like caption) on a consolidated balance sheet of the Borrower and the Restricted Subsidiaries at such date.
Consolidated Unrestricted Subsidiaries” means any Unrestricted Subsidiaries that are Consolidated Subsidiaries.
Control” means the possession, directly or indirectly, of the power to direct or cause the direction of the management or policies of a Person, whether through the ability to exercise voting power, by contract or otherwise. “Controlling” and “Controlled” have meanings correlative thereto.
Corresponding Tenor” with respect to any Available Tenor means, as applicable, either a tenor (including overnight) or an interest payment period having approximately the same length (disregarding business day adjustment) as such Available Tenor.
“Covered Entity” means any of the following:
(A)a “covered entity” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 252.82(b);
(B)a “covered bank” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 47.3(b); or
(C)a “covered FSI” as that term is defined in, and interpreted in accordance with, 12 C.F.R. § 382.2(b).
“Covered Party” has the meaning assigned to it in Section 12.25(a).
Credit Bid” means an offer submitted by the Administrative Agent (on behalf of the Lenders), based upon the instruction of the Majority Lenders, to acquire the Property or Equity Interests of the Borrower or any Guarantor or any portion thereof in exchange for and in full and final satisfaction of all or a portion (as determined by the Administrative Agent, based upon the instruction of the Majority Lenders) of the claims and Secured Obligations under this Agreement and other Loan Documents.
Credit Parties” means collectively the Borrower and each other Guarantor.
Current Assets” means, as of any date of determination, without duplication, the sum of all amounts that would, in accordance with GAAP, be set forth opposite the caption “total current assets” (or any like caption) on a consolidated balance sheet of the Borrower and its Consolidated Restricted Subsidiaries at such date, plus the unused Aggregate Revolving Credit Commitment, but excluding (a) all non-cash assets under FASB ASC Topic 815 and (b) current assets representing prepaid expenses as a result of one or more LC Disbursements made to the beneficiaries thereof in connection with the Midstream Dispute.
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Current Liabilities” means, as of any date of determination, without duplication, the sum of all amounts that would, in accordance with GAAP, be set forth opposite the caption “total current liabilities” (or any like caption) on a consolidated balance sheet of the Borrower and its Consolidated Restricted Subsidiaries on such date, but excluding (a) all non-cash obligations under FASB ASC Topic 815, (b) the current portion (if any) of the Loans under this Agreement and the current portion (if any) of the Senior Unsecured 2026 Notes and (c) accounts payable in connection with the Midstream Dispute prior to the time that either (x) (1) the Bankruptcy Court or another court of competent jurisdiction shall have entered one or more Final Orders providing a resolution with respect to the Midstream Dispute or (2) the parties to the Midstream Dispute achieve a consensual resolution or (y) if the Midstream Dispute is a negotiation, such negotiation is resolved or terminated.
Current Ratio” means, with respect to the Borrower and its Consolidated Restricted Subsidiaries, as of any date of determination, the ratio of (a) Current Assets as of such date to (b) Current Liabilities as of such date.
Daily Simple SOFR” means, for any day, (a “SOFR, with the conventions for this rate (which may include a lookback) being established by the Administrative Agent in accordance with the conventions for this rate selected or recommended by the Relevant Governmental Body for determining “Daily Simple SOFR” for business loans; provided, that if the Administrative Agent decides that any such convention is not administratively feasible for the Administrative Agent, then the Administrative Agent may establish another convention in its reasonable discretion. Rate Day”), a rate per annum equal to SOFR for the day (such day “SOFR Determination Date”) that is five (5) U.S. Government Securities Business Days prior to (i) if such SOFR Rate Day is a U.S. Government Securities Business Day, such SOFR Rate Day or (ii) if such SOFR Rate Day is not a U.S. Government Securities Business Day, the U.S. Government Securities Business Day immediately preceding such SOFR Rate Day, in each case, as such SOFR is published by the SOFR Administrator on the SOFR Administrator’s Website. Any change in Daily Simple SOFR due to a change in SOFR shall be effective from and including the effective date of such change in SOFR without notice to the Borrower.
Debt” means, for any Person, the sum of the following (without duplication): (a) all obligations of such Person for borrowed money or evidenced by bonds, bankers’ acceptances, debentures, loan agreements, notes or other similar instruments; (b) all obligations of such Person (whether contingent or otherwise) in respect of letters of credit, surety or other bonds and similar instruments; (c) all accounts payable, accrued expenses, liabilities or other obligations of such Person, in each such case to pay the deferred purchase price of Property or services (other than (i) accrued pension costs and other employee benefit and compensation obligations arising in the ordinary course of business and (ii) accounts payable incurred in the ordinary course of business which are either (A) not overdue by more than 60 days or (B) being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP); (d) all Capital Lease Obligations and Purchase Money Obligations; (e) all obligations under Synthetic Leases; (f) all Debt (as defined in the other clauses of this definition) of others secured by (or for which the holder of such Debt has an existing right, contingent or otherwise, to be secured by) a Lien on any Property of such Person, whether or not such Debt is assumed by such Person; provided that the amount of Debt for purposes of this clause (f) shall be an amount equal to the lesser of the unpaid principal amount of such Debt and the fair market value of the encumbered Property; (g) all Debt (as defined in the other clauses of this definition) of others guaranteed by such Person or with respect to which such Person otherwise assures a creditor against loss of the Debt (howsoever such assurance shall be made) to the extent of the lesser of the amount of such Debt and the maximum stated amount of such guarantee or assurance against loss; (h) all obligations or undertakings of such Person to maintain or cause to be maintained the financial position or covenants of others or to purchase the Debt of others; (i) obligations to deliver commodities, goods or services, including, without limitation,
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Hydrocarbons, in consideration of one or more Advance Payments, other than gas balancing arrangements, take or pay arrangements for the gathering, processing or transportation of production, or other similar arrangements, in each case in the ordinary course of business (but only to the extent of such Advance Payments); (j) [reserved]; (k) any Debt of a partnership for which such Person is liable either by agreement, by operation of law or by a Governmental Requirement but only to the extent of such liability; (l) Disqualified Capital Stock of such Person; and (m) the undischarged balance of any production payment created by such Person or for the creation of which such Person directly or indirectly received payment. The Debt of any Person shall include all obligations of such Person of the character described above to the extent such Person remains legally liable in respect thereof notwithstanding that any such obligation is not included as a liability of such Person under GAAP. For avoidance of doubt, Debt does not include Wexford ULC Obligations.
Debtor Relief Laws” shall mean the Bankruptcy Code, and all other liquidation, conservatorship, bankruptcy, assignment for the benefit of creditors, moratorium, rearrangement, receivership, insolvency, reorganization or similar debtor relief laws of the United States of America or other applicable jurisdictions from time to time in effect.
Dedication” means an acreage dedication, wellbore dedication, unit dedication or other dedication of Oil and Gas Properties or other similar conveyance of an interest in real property which establishes or purports to establish a covenant running with the land or its equivalent under the applicable law of the relevant jurisdiction.
Default” means any event or condition which constitutes an Event of Default or which upon notice, lapse of time or both would, unless cured or waived, become an Event of Default.
“Default Right” has the meaning assigned to that term in, and shall be interpreted in accordance with, 12 C.F.R. §§ 252.81, 47.2 or 382.1, as applicable.
Defaulting Lender” means any Lender that (a) has failed, within two Business Days of the date required to be funded or paid, to (i) fund any portion of its Loans, (ii) fund any portion of its participations in Letters of Credit or (iii) pay over to any Lender Party any other amount required to be paid by it hereunder, unless, in the case of clause (i) above, such Lender notifies the Administrative Agent in writing that such failure is the result of such Lender’s good faith determination that a condition precedent to funding (specifically identified and including the particular default, if any) has not been satisfied, (b) has notified the Borrower or any Lender Party in writing, or has made a public statement to the effect, that it does not intend or expect to comply with any of its funding obligations under this Agreement (unless such writing or public statement indicates that such position is based on such Lender’s good faith determination that a condition precedent (specifically identified and including the particular default, if any) to funding a Loan under this Agreement cannot be satisfied), (c) has failed, within three Business Days after request by a Lender Party, acting in good faith, to provide a certification in writing from an authorized officer of such Lender that it will comply with its obligations (and is financially able to meet such obligations) to fund prospective Loans and participations in then outstanding Letters of Credit under this Agreement; provided that such Lender shall cease to be a Defaulting Lender pursuant to this clause (c) upon such Lender Party’s receipt of such certification in form and substance satisfactory to it and the Administrative Agent, or (d) has, or whose Lender Parent has, become the subject of a Bankruptcy Event or a Bail-In Action.
“Deficiency Notification Date” has the meaning assigned to such term in Section 3.04(c)(ii).
Deposit Account” has the meaning assigned to such term in the UCC.
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Disinterested Director” shall mean, with respect to any Person and transaction, a member of the board of directors of such Person who does not have any material direct or indirect financial interest in or with respect to such transaction.
Disposition” means any conveyance, sale, lease, sale and leaseback, assignment (other than assignments intended to convey a Lien), farm-out, transfer, investment, contribution or other disposition of any Property, and including, for the avoidance of doubt, any Casualty Event. “Dispose” has a correlative meaning thereto.
Disqualified Capital Stock” means any Equity Interest that, by its terms (or by the terms of any security into which it is convertible or for which it is exchangeable) or upon the happening of any event, matures or is mandatorily redeemable (other than customary offers to purchase upon (i) a “change in control,” that is subject to the prior Payment in Full or (ii) asset sale or other Disposition that is subject to the prior Payment in Full or to the extent the terms of such Equity Interests provide that such Equity Interests shall not be required to be repurchased or redeemed until the Maturity Date has occurred or such repurchase or redemption is otherwise permitted by this Agreement) for any consideration other than other Equity Interests (that would not constitute Disqualified Capital Stock), pursuant to a sinking fund obligation or otherwise, or is convertible or exchangeable for Debt or redeemable for any consideration other than other Equity Interests (which would not constitute Disqualified Capital Stock) at the option of the holder thereof, in whole or in part, or requires the payment of any cash dividend or any other scheduled payment constituting a return of capital, in the case of each of the foregoing, on or prior to the date that is 180 days after the earlier of (a) the Maturity Date as in effect on the date of determination and (b) the date on which there are no Loans, LC Exposure or other obligations hereunder outstanding and all of the Revolving Credit Commitments are terminated. The Preferred Equity shall not constitute Disqualified Capital Stock as of the Effective Date.
dollars” or “$” refers to lawful money of the United States of America.
Domestic Subsidiary” means any Subsidiary (whether a Restricted Subsidiary or an Unrestricted Subsidiary) that is organized under the laws of the United States of America or any state thereof or the District of Columbia.
Early Opt-in Election” means, if the then-current Benchmark is the LIBO Rate, the occurrence of:
(1)    a notification by the Administrative Agent to (or the request by the Borrower to the Administrative Agent to notify) each of the other parties hereto that at least five currently outstanding dollar-denominated syndicated credit facilities at such time contain (as a result of amendment or as originally executed) a SOFR-based rate (including SOFR, a term SOFR or any other rate based upon SOFR) as a benchmark rate (and such syndicated credit facilities are identified in such notice and are publicly available for review), and
(2)    the joint election by the Administrative Agent and the Borrower to trigger a fallback from the LIBO Rate and the provision by the Administrative Agent of written notice of such election to the Lenders.
EBITDAX” means, for any period, on a consolidated basis for the Borrower and its Consolidated Restricted Subsidiaries, (a) Consolidated Net Income for such period plus, (b) to the extent reducing (and not excluded from) Consolidated Net Income, without duplication: (i) Interest Expense, (ii) income or franchise Taxes, (iii) depreciation, depletion, amortization for such period, (iv) exploration expenses (to the extent the Borrower adopts the successful efforts method of accounting); (v) extraordinary or non-recurring charges and losses (or minus any
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extraordinary or non-recurring gains), (vi) other non-cash charges reducing Consolidated Net Income but excluding any such non-cash charge (other than non-cash charges and expenses arising from midstream contracts which the Borrower filed a motion to reject with the Bankruptcy Court) to the extent that it represents an accrual or reserve for a potential cash charge in any future period or amortization of a prepaid cash charge that was paid in a prior period; provided that with respect to any non-cash charges and expenses arising from any such midstream contracts, the cash payment in respect thereof in such future period shall be subtracted from EBITDAX, (vii) fees, costs and expenses incurred with regard to negotiation, execution and delivery of this Agreement and the other Loan Documents, including any amendments thereto in any four fiscal quarter period, (viii) to the extent actually reimbursed by insurance, expenses with respect to liability on casualty events or business interruption and (ix) all reasonable transaction expenses related to Dispositions and acquisitions of assets, investments and debt and equity offerings by any Credit Party (in each case whether or not successful, provided that expenses related to unsuccessful Dispositions shall be limited to $3,000,000 in the aggregate for the period from the Effective Date to the Maturity Date); minus (c)  all non-cash gains to the extent included in the calculation of Consolidated Net Income and increasing Consolidated Net Income for such period (excluding any such non cash gain to the extent it represents the reversal of an accrual or reserve for a potential cash gain in any prior period). For the purposes of calculating EBITDAX for any period of four (4) consecutive fiscal quarters (each, a “Reference Period”), (i) if during such Reference Period, the Borrower or any Consolidated Restricted Subsidiary shall have made any Material Disposition, EBITDAX for such Reference Period shall be reduced by an amount equal to the EBITDAX (if positive) attributable to the Property that is the subject of such Material Disposition for such Reference Period or increased by an amount equal to the EBITDAX (if negative) attributable thereto for such Reference Period, (ii) if during such Reference Period, the Borrower or any Consolidated Restricted Subsidiary shall have made a Material Acquisition, EBITDAX for such Reference Period shall be calculated after giving pro forma effect thereto as if such Material Acquisition occurred on the first day of such Reference Period and (iii) if during such Reference Period a Consolidated Subsidiary shall be redesignated as either a Consolidated Unrestricted Subsidiary or a Consolidated Restricted Subsidiary, EBITDAX shall be calculated after giving pro forma effect to such redesignation, as if such redesignation had occurred on the first day of such Reference Period.
EBITDAX shall be calculated for each four-fiscal quarter period using the EBITDAX for the four most recently ended fiscal quarters (or with respect to fiscal quarters ending on or before March 31, 2022, Annualized EBITDAX).
EDGAR” means the Electronic Data Gathering Analysis and Retrieval system operated by the SEC.
EEA Financial Institution” means (a) any credit institution or investment firm established in any EEA Member Country which is subject to the supervision of an EEA Resolution Authority, (b) any entity established in an EEA Member Country which is a parent of an institution described in clause (a) of this definition, or (c) any financial institution established in an EEA Member Country which is a subsidiary of an institution described in clauses (a) or (b) of this definition and is subject to consolidated supervision with its parent.
EEA Member Country” means any of the member states of the European Union, Iceland, Liechtenstein, and Norway.
EEA Resolution Authority” means any public administrative authority or any person entrusted with public administrative authority of any EEA Member Country (including any delegee) having responsibility for the resolution of any EEA Financial Institution.
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Effective Date” means the date on which the conditions specified in Section 6.01 are satisfied (or waived in accordance with Section 12.02).
Elected Commitment” means, as to each Lender, the amount set forth opposite such Lender’s name on Annex I under the caption “Elected Commitment”, as the same may be increased, reduced or terminated from time to time in connection with an optional increase, reduction or termination of the Aggregate Elected Commitment Amounts pursuant to Section 2.06(b) or (c).
Elected Commitment Increase Agreement” has the meaning given to such term in Section 2.06(c)(ii)(F).
Electronic Signature” means an electronic sound, symbol, or process attached to, or associated with, a contract or other record and adopted by a Person with the intent to sign, authenticate or accept such contract or record.
Enforcement Action” means any action to enforce any Secured Obligations or Loan Documents or to exercise any rights or remedies relating to any Collateral (whether by judicial action, self-help, notification of account debtors, setoff or recoupment, Credit Bid, action in a Credit Party’s Insolvency Proceeding or otherwise).
Engineering Reports” has the meaning assigned to such term in Section 2.07(c)(i).
Environmental Laws” means any and all Governmental Requirements pertaining in any way to human health and safety (to the extent relating to exposure to Hazardous Materials), the protection of the environment or the preservation or reclamation of natural resources, including without limitation, the Oil Pollution Act of 1990 (“OPA”), as amended, the Clean Air Act, as amended, the Comprehensive Environmental, Response, Compensation, and Liability Act of 1980 (“CERCLA”), as amended, the Federal Water Pollution Control Act, as amended, the Occupational Safety and Health Act of 1970, as amended, the Resource Conservation and Recovery Act of 1976 (“RCRA”), as amended, the Safe Drinking Water Act, as amended, the Toxic Substances Control Act, as amended, the Superfund Amendments and Reauthorization Act of 1986, as amended, and the Hazardous Materials Transportation Act, as amended, and comparable state laws.
Environmental Permit” means any permit, registration, certificate, license, approval, consent, exemption, waiver, variance, or other authorization of a Governmental Authority required under applicable Environmental Laws.
Equity Interests” means shares of capital stock, partnership interests, membership interests in a limited liability company, beneficial interests in a trust or other equity ownership interests in a Person, and any warrants, options or other rights entitling the holder thereof to purchase or acquire any of the foregoing.
ERISA” means the Employee Retirement Income Security Act of 1974, as amended, and any successor statute, and the rules and regulations promulgated thereunder.
ERISA Affiliate” means each trade or business (whether or not incorporated) which together with the Credit Parties would be deemed to be a “single employer” within the meaning of Section 4001(b)(1) of ERISA or Sections 414(b) or (c) of the Code or, solely for purposes of Section 412 of the Code, Section 414 of the Code.
ERISA Event” means (a) a reportable event described in Section 4043(c) of ERISA and the regulations issued thereunder with respect to which the reporting requirement has not been
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waived by applicable regulations, (b) the withdrawal of the Credit Parties or any ERISA Affiliate from a Plan during a plan year in which it was a “substantial employer” as defined in Section 4001(a)(2) of ERISA, (c) the filing of a notice of intent to terminate a Plan or the treatment of a Plan amendment as a termination under Section 4041 of ERISA, (d) the institution of proceedings to terminate a Plan by the PBGC, (e) receipt by the Credit Parties or any ERISA Affiliate of a notice of withdrawal liability pursuant to Section 4202 of ERISA with respect to any Multiemployer Plan or the receipt by a Credit Party or any of their respective ERISA Affiliates of notice from any Multiemployer Plan that it is in insolvency pursuant to Section 4245 of ERISA, or that it intends to terminate or has terminated under Section 4041A or 4042 of ERISA, (f) the failure of a Plan to meet the minimum funding standards under Section 412 of the Code or Section 302(c) of ERISA (determined without regard to Section 412(c) of the Code or Section 302(c) of ERISA), (g) the failure of a Plan to satisfy the requirements of Section 401(a)(29) of the Code, Section 436 of the Code or Section 206(g) of ERISA, (h) the incurrence of liability or the imposition of a Lien pursuant to Section 436 or 430(k) of the Code or pursuant to ERISA with respect to any Plan, (i) any other event or condition which would reasonably be expected to constitute grounds under Section 4042 of ERISA for the termination of, or the appointment of a trustee to administer, any Plan or (j) any Credit Party engaging in a non-exempt prohibited transaction within the meaning of Section 4975 of the Code or Section 406 of ERISA with respect to a Benefit Plan.
EU Bail-In Legislation Schedule” means the EU Bail-In Legislation Schedule published by the Loan Market Association (or any successor person), as in effect from time to time.
Eurodollar”, when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted LIBO Rate.
Event of Default” has the meaning assigned to such term in Section 10.01.
Excepted Liens” means: (a) Liens for Taxes, assessments or other governmental charges or levies which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (b) Liens in connection with workers’ compensation, unemployment insurance or other social security, old age pension or public liability obligations which are not delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (c) statutory landlord’s liens, operators’, vendors’, carriers’, warehousemen’s, repairmen’s, mechanics’, suppliers’, workers’, materialmen’s, construction or other like Liens arising by operation of law in the ordinary course of business or incident to the exploration, development, operation and maintenance of Oil and Gas Properties each of which is in respect of obligations that are not more than 30 days delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP; (d) contractual Liens which arise in the ordinary course of business under operating agreements, joint venture agreements, oil and gas partnership agreements, oil and gas leases, farm-out agreements, division orders, contracts for the sale, transportation or exchange of oil and natural gas, unitization and pooling declarations and agreements, area of mutual interest agreements, royalty agreements, overriding royalty agreements, marketing agreements, processing agreements, net profits agreements, development agreements, gas balancing or deferred production agreements, injection, repressuring and recycling agreements, salt water or other disposal agreements, seismic or other geophysical permits or agreements, and other agreements which are usual and customary in the oil and gas business and are for claims which are not more than 30 days delinquent or which are being contested in good faith by appropriate action and for which adequate reserves have been maintained in accordance with GAAP, provided that any such Lien referred to in this clause does not (x) materially impair the use of the Property covered by such Lien for the purposes for which
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such Property is held by the Credit Parties or the Restricted Subsidiaries or (y) materially impair the value of any material Property subject thereto, excluding, for purposes of this clause (y), any transactions permitted under Sections 9.05, 9.09 or 9.11 of this Agreement; (e) Liens arising solely by virtue of any statutory or common law provision or customary deposit account terms (pursuant to a depository institution’s standard documentation that is provided to its customers generally or pursuant to Account Control Agreements) relating to banker’s liens, rights of set-off or similar rights and remedies and burdening only deposit accounts or other funds maintained with a creditor depository institution, provided that no such deposit account is a dedicated cash collateral account or is subject to restrictions against access by the depositor in excess of those set forth by regulations promulgated by the Federal Reserve Board and no such deposit account is intended by the Credit Parties or the Restricted Subsidiaries to provide collateral to the depository institution; (f) easements, rights of way, restrictions, servitudes, permits, restrictive covenants, exceptions or reservations in any Property of the Credit Parties or the Restricted Subsidiaries (including for the purpose of roads, pipelines, transmission lines, transportation lines, distribution lines for the removal of gas, oil, coal or other minerals or timber, and other like purposes, or for the joint or common use of real property, zoning restrictions, rights of way, facilities and equipment, and Liens related to surface leases and surface operations) that do not secure any monetary obligations and which in the aggregate do not materially impair the use of such Property for the purposes of which such Property is held by the Credit Parties or the Restricted Subsidiaries or materially impair the value of any material Property subject thereto; (g) Liens on cash or securities pledged to secure performance of tenders, surety and appeal bonds, government contracts, performance and return of money bonds, bids, trade contracts, leases, statutory obligations, regulatory obligations and other obligations of a like nature incurred in the ordinary course of business; (h) judgment and attachment Liens on any Property, including Oil and Gas Property, not giving rise to an Event of Default; provided that any appropriate legal proceedings which may have been duly initiated for the review of such judgment shall not have been finally terminated or the period within which such proceeding may be initiated shall not have expired and no action to enforce such Lien has been commenced; (i) Liens pursuant to merger agreements, stock purchase agreements, asset sale agreements and similar agreements (1) limiting the transfer of properties and assets pending consummation of the subject transaction or (2) in respect of earnest money deposits, good faith deposits, purchase price adjustment escrows and similar deposits and escrow arrangements made or established thereunder; (j) Liens arising from precautionary Uniform Commercial Code financing statement filings covering Property under true leases entered into in the ordinary course of business covering only the Property under lease; (k) Liens to secure plugging and abandonment obligations; and (l) Liens encumbering insurance policies and the proceeds thereof securing the financing of insurance premiums; provided, further Liens described in clauses (a) through (e) shall remain “Excepted Liens” only for so long as no action to enforce such Lien has been commenced; provided further, (x) no intention to subordinate the first priority Lien granted in favor of the Administrative Agent and the Lenders is to be hereby implied or expressed by the permitted existence of any Excepted Liens and (y) in no event shall “Excepted Liens” secure Debt for borrowed money and (z) Dedications shall not be “Excepted Liens”.
Excess Cash” means, as of any date of determination, cash and Cash Equivalents of Holdings, the Borrower or any Restricted Subsidiary other than (a) any cash allocated for, reserved or otherwise set aside to pay royalty obligations, working interest obligations, vendor payments, suspense payments, production payments, similar payments as are customary in the oil and gas industry, severance and ad valorem Taxes, payroll, payroll Taxes, other Taxes, and employee wage and benefit payment obligations of Holdings, the Borrower or any Restricted Subsidiary then due and owing as of such date (or to be due and owing within five (5) Business Days of such date) and for which Holdings, the Borrower or such Restricted Subsidiary either (x) has issued checks or has initiated wires or ACH transfers or (y) reasonably anticipates in good faith that it will issue checks or initiate wires or ACH transfers within five (5) business days of such date, (b) any cash allocated for, reserved or otherwise set aside to pay other amounts (other
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than obligations described in clause (a) above) permitted to be paid by Holdings, the Borrower or its Restricted Subsidiaries in accordance with this Agreement and the other Loan Documents then due and owing as of such date (or to be due and owing within five (5) Business Days of such date) to Persons who (x) are not Affiliates of the Credit Parties or (y) are holders under any Permitted Debt (solely with respect to interest payments under such Permitted Debt) and, in each case for which obligations Holdings, the Borrower or any Restricted Subsidiary has (i) issued checks or has initiated wires or ACH transfers or (ii) reasonably anticipates in good faith that it will issue checks and initiate wires or ACH transfers within five (5) Business Days of such date, (c) any cash of Holdings, the Borrower or any Restricted Subsidiary constituting pledges and/or deposits securing any binding and enforceable purchase and sale agreement with any Persons who are not Affiliates of the Credit Parties, in each case to the extent permitted by this Agreement, (d) cash deposited with an Issuing Bank to cash collateralize Letters of Credit, (e) any amounts in an Excluded Account that is an Excluded Account solely because in the aggregate all such Excluded Accounts do not have a balance greater than $5,000,000 and (f) any proceeds of a Borrowing used (i) to fund the purchase price or deposits of any acquisition not prohibited under this Agreement or (ii) to make debt payments not prohibited under this Agreement, in each case to the extent the Borrower has provided notice to the Administrative Agent of such purpose on or prior to the date of such Borrowing, provided that, in the case of this clause (f), such proceeds shall only constitute Excluded Cash from the date of such Borrowing through and including the second Business Day after such Borrowing.
Excess Cash Threshold” means, as of the date of any determination, the amount that is equal to $45,000,000.
Exchange Act” means the Securities Exchange Act of 1934, as amended, and the rules and regulations promulgated thereunder.
Excluded Accounts” means, with respect to the Credit Parties or any Restricted Subsidiary, each Deposit Account designated on Schedule 7.25 (as the same may be supplemented by the Borrower from time to time upon delivery of a written supplement to the Administrative Agent) as an “Excluded Account” and that is not subject to an Account Control Agreement, to the extent constituting (a) accounts exclusively used for payroll, payroll taxes or other employee wage and benefit payments, (b) accounts exclusively holding assets subject to an escrow or purchase price adjustment mechanism, (c) segregated accounts, the balance of which consists exclusively of funds due and owing to unaffiliated third parties in connection with royalty payment obligations owed to such third parties, or working interest payments received from unaffiliated third parties, solely to the extent such amounts constitute property of such third party held in trust, and (d) accounts having balances not greater than $5,000,000 in the aggregate for all such accounts.
Excluded Assets” shall mean:
(a)    any fee owned real property and any leasehold rights and interests in real property (other than Oil and Gas Properties);
(b)    motor vehicles (and other assets covered by certificates of title or ownership), in each case, except to the extent the security interest in such assets can be perfected by the filing of an “all assets” Uniform Commercial Code financing statement;
(c)    those assets over which the granting of security interests in such assets would be prohibited by any contract, applicable law or regulation but only to the extent and for so long as a grant of a security interest therein in favor of the Administrative Agent would (x) violate or invalidate such contract, cause the acceleration or the termination thereof or create a right of termination in favor of any other party
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thereto (other than the Borrower or any of its Subsidiaries) or (y) violate such applicable law or regulation, other than to the extent such prohibition is rendered ineffective under the UCC or other applicable law notwithstanding such prohibition;
(d)    particular assets if reasonably agreed by the Administrative Agent and the Borrower, the cost of creating a pledge or security interest in such assets exceed the practical benefits to be obtained by the Lenders therefrom; and
(e)     except as provided in Section 8.14, any assets located outside the United States to the extent that such assets require action under the law of any non-U.S. jurisdiction to create or perfect a security interest in such assets under such non-U.S. jurisdiction, including any intellectual property registered in any non-U.S. jurisdiction;
provided, however, that Excluded Assets shall not include any proceeds, substitutions or replacements of any Excluded Assets referred to in clauses (a) through (d) (unless such proceeds, substitutions or replacements would independently constitute Excluded Assets referred to in clauses (a) through (d)).
Excluded Subsidiary” means any direct or indirect subsidiary of any Credit Party that (a) is an Unrestricted Subsidiary, (b) is Grizzly Oil Sands, (c) is not a Wholly-Owned Subsidiary or (d) is an Immaterial Subsidiary.
Excluded Swap Obligation” has the meaning assigned to such term in the Guaranty and Collateral Agreement.
Excluded Taxes” means any of the following Taxes imposed on or with respect to a Recipient or required to be withheld or deducted from a payment to a Recipient, (a) Taxes imposed on (or measured by) its net income (however denominated), franchise Taxes, and branch profits Taxes, in each case, (i) imposed as a result of such Recipient being organized under the laws of, or having its principal office or, in the case of any Lender, its applicable lending office located in, the jurisdiction imposing such Tax (or any political subdivision thereof) or (ii) that are Other Connection Taxes, (b) in the case of a Lender, any U.S. federal withholding Tax that is imposed on amounts payable to or for the account of such Lender with respect to an applicable interest in a Loan, Letter of Credit or Revolving Credit Commitment pursuant to a law in effect on the date on which (i) such Lender acquires such interest in the Loan, Letter of Credit, or Revolving Credit Commitment (other than pursuant to an assignment request by the Borrower under Section 5.04(b)), or (ii) such Lender changes its lending office, except in each case to the extent that, pursuant to Section 5.03, amounts with respect to such Taxes were payable either to such Lender’s assignor immediately before such Lender became a party hereto or to such Lender immediately before it changed its lending office (c) any Taxes attributable to a Recipient’s failure to comply with Section 5.03(e) and (d) any Taxes imposed under FATCA.
Existing Administrative Agent” has the meaning assigned to such term in Recital A.
Existing Credit Agreement” has the meaning assigned to such term in Recital A.
Existing Facilities” has the meaning assigned to such term in Recital A.
Existing Issuing Bank” has the meaning assigned to such term in Recital A.
Existing Lenders” has the meaning assigned to such term in Recital A.
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Existing Letters of Credit” means those certain letters of credit as described on Schedule 1.02(a) , as such letters of credit may be amended, renewed or extended from time to time.
Existing Loan Documents” means the “Loan Documents” as defined in the Existing Credit Agreement.
Existing Mortgages” means each of those certain mortgages and deeds of trust, fixture filings, assignments of as-extracted collateral, security agreements and financing statements executed and delivered by a Credit Party or a subsidiary of the Borrower, as the “grantor” or “mortgagor,” for the benefit of the Existing Administrative Agent, as amended, amended and restated, supplemented and modified prior to the date hereof, and recorded in the office designated for the filing of a record of a mortgage, deed of trust or financing statement in the applicable jurisdictions.
Extraordinary Expenses” means all costs, expenses or advances that the Administrative Agent may incur during a Default or Event of Default, or during the pendency of an Insolvency Proceeding of a Credit Party, including those relating to (a) any audit, inspection, repossession, storage, repair, appraisal, insurance, manufacture, preparation or advertising for sale, sale, collection, or other preservation of or realization upon any Collateral; (b) any action, arbitration or other proceeding (whether instituted by or against the Administrative Agent, any Lender, any Credit Party, any representative of creditors of a Credit Party or any other Person) in any way relating to any Collateral (including the validity, perfection, priority or avoidance of the Administrative Agent’s Liens with respect to any Collateral), Loan Documents, Letters of Credit or other Secured Obligations, including any lender liability or other claims; (c) the exercise of any rights or remedies of the Administrative Agent in, or the monitoring of, any Insolvency Proceeding; (d) settlement or satisfaction of Taxes, charges or Liens with respect to any Collateral; (e) any Enforcement Action; and (f) negotiation and documentation of any modification, waiver, workout, restructuring or forbearance with respect to any Loan Documents or Secured Obligations. Such costs, expenses and advances include transfer fees, Other Taxes, storage fees, insurance costs, permit fees, utility reservation and standby fees, legal fees of outside counsel, appraisal fees, brokers’ and auctioneers’ fees and commissions, accountants’ fees, environmental study fees, wages and salaries paid to employees of any Credit Party or independent contractors in liquidating any Collateral, and reasonable travel and other expenses.
FATCA” means Sections 1471 through 1474 of the Code, as of the date of this Agreement (and any amended or successor version to the extent substantively comparable and not materially more onerous to comply with), any current or future regulations or official interpretations thereof, any agreements entered into pursuant to Section 1471(b)(1) of the Code and any fiscal or regulatory legislation, rules or practices adopted pursuant to any intergovernmental agreement, treaty or convention among Governmental Authorities and implementing such Sections of the Code.
FCA” has the meaning assigned to such term in Section 1.07.
FCPA” means the Foreign Corrupt Practices Act of 1977, as amended.
Federal Funds Effective Rate” means, for any day, the rate calculated by the NYFRB based on such day’s federal funds transactions by depositary institutions, as determined in such manner as shall be set forth on the Federal Reserve Bank of New York’sNYFRB’s Website from time to time, and published on the next succeeding Business Day by the NYFRB as the effective federal funds rate; provided that if the Federal Funds Effective Rate as so determined would be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.
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Federal Reserve Bank of New York’s Website” means the website of the Federal Reserve Bank of New York at http://www.newyorkfed.org, or any successor source.
Federal Reserve Board” means the Board of Governors of the Federal Reserve System of the United States of America or any successor Governmental Authority.
Fee Letter” means that certain Engagement Letter dated September 10, 2021, among JPMorgan, the Borrower and Holdings.
Final Order” means, as applicable, an order or judgment of the Bankruptcy Court, or other court of competent jurisdiction with respect to the relevant subject matter, that has not been reversed, stayed, modified, or amended, and as to which the time to appeal, seek certiorari, or move for a new trial, reargument, or rehearing has expired and as to which no appeal, petition for certiorari, or other proceeding for a new trial, reargument, or rehearing has been timely taken; or as to which, any appeal that has been taken or any petition for certiorari that has been or may be filed has been withdrawn with prejudice, resolved by the highest court to which the order or judgment could be appealed or from which certiorari could be sought, or the new trial, reargument, or rehearing has been denied, resulted in no stay pending appeal or modification of such order, or has otherwise been dismissed with prejudice; provided that the possibility that a motion under Rule 60 of the Federal Rules of Civil Procedure, or any analogous rule under the Bankruptcy Rules, may be filed with respect to such order will not preclude such order from being a Final Order.
Financial Officer” means, for any Person, the chief financial officer, principal accounting officer, or treasurer of such Person (or in the case of any Person that is a partnership, of such Person’s general partner). Unless otherwise specified, all references to a Financial Officer herein mean a Financial Officer of the Borrower.
Financial Statements” means the financial statement or statements of Holdings, the Borrower and its Consolidated Subsidiaries referred to in Section 7.04(a).
Floor” means 0.00%, which was the benchmark rate floor provided in this Agreement as of the Effective Date.
Foreign Lender” means any Lender that is not a U.S. Person.
Foreign Subsidiary” means any Subsidiary (whether a Restricted Subsidiary or an Unrestricted Subsidiary) that is not a Domestic Subsidiary.
Free Cash Flow” means, with respect to any time of calculation thereof, the sum of the following as of the last day of the most recently ended Measurement Period for which financial statements have been delivered pursuant to Section 8.01(a) or Section 8.01(b): (a) EBITDAX for such Measurement Period, minus (b) the increase (or plus the decrease) in Working Capital for such Measurement Period, minus (c) the sum, without duplication, of the amounts for such Measurement Period of (i) voluntary and scheduled cash repayments of Debt (other than the Loans) which cannot be reborrowed pursuant to the terms of such Debt, (ii) capital expenditures paid in cash, (iii) consolidated interest expense paid in cash, (iv) taxes paid in cash, (v) exploration expenses paid in cash, (vi) plugging and abandonment expenses actually paid in cash, (vii) to the extent not included in the foregoing, all other cash charges that otherwise served to increase EBITDAX for such Measurement Period, except in the case of clauses (c)(i)-(vii) above to the extent such cash was financed with proceeds of any substantially concurrent (with sixty (60) days being deemed substantially concurrent) issuance of Equity Interests or incurrence long-term Debt for borrowing money permitted by the Loan Documents (other than the proceeds of a Borrowing or LC Disbursement).
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GAAP” means generally accepted accounting principles in the United States of America as in effect from time to time subject to the terms and conditions set forth in Section 1.05.
Gas Balancing Agreement” means any agreement or arrangement whereby any Credit Party, or any other party having an interest in any Hydrocarbons to be produced from Hydrocarbon Interests in which any Credit Party owns an interest, has a right to take more than its proportionate share of production therefrom.
Governmental Authority” means the government of the United States of America, any other nation or any political subdivision thereof, whether state or local, and any agency, authority, instrumentality, regulatory body, court, central bank or other entity exercising executive, legislative, judicial, taxing, regulatory or administrative powers or functions of or pertaining to government (including any supranational bodies exercising such powers or functions, such as the European Union or the European Central Bank).
Governmental Requirement” means any law, statute, code, ordinance, order, determination, rule, regulation, judgment, decree, injunction, rules of common law, or other directive or requirement, whether now or hereinafter in effect of any Governmental Authority.
Grizzly Oil Sands” means Grizzly Oil Sands ULC, a corporation formed under the laws of Alberta, Canada, together with its direct and indirect subsidiaries (if any).
Guarantor” means Holdings and each Restricted Subsidiary that is a party to the Guaranty and Collateral Agreement as a “Guarantor” and “Grantor” (as such terms are defined in the Guaranty and Collateral Agreement) and guarantees the Secured Obligations pursuant to Existing Loan Documents that have been Assigned pursuant to one or more Security Instrument Assignments, documentation delivered on the Effective Date pursuant to Section 6.01 or documentation delivered after the Effective Date pursuant to Section 8.14(b). For the avoidance of doubt, Grizzly Oil Sands is not a Guarantor under the Existing Loan Documents and shall not be a Guarantor hereunder.
Guaranty and Collateral Agreement” means the Amended and Restated Guaranty and Collateral Agreement, dated as of the Effective Date and substantially in the form attached hereto as Exhibit C, executed by the Borrower, the Guarantors and the Administrative Agent, as the same may be amended, restated, amended and restated, modified or supplemented from time to time.
Hazardous Material” means any chemical, material, substance or waste regulated, or as to which liability may be imposed, under any applicable Environmental Law due to its hazardous or dangerous properties or characteristics, including, without limitation: (a) any chemical, compound, material, substance or waste defined as, or included in the definition or meaning of, “hazardous substance,” “hazardous material,” “hazardous waste,” “solid waste,” “toxic waste,” “extremely hazardous substance,” “toxic substance,” “contaminant,” or “pollutant,” or words of similar meaning or effect, found in any applicable Environmental Law; (b) petroleum hydrocarbons, petroleum products or byproducts, natural gas, and crude oil; and (c) radioactive materials, asbestos containing materials, polychlorinated biphenyls, or radon.
Highest Lawful Rate” means, with respect to each Lender, the maximum non-usurious interest rate, if any, that at any time or from time to time may be contracted for, taken, reserved, charged or received on the Notes or on other Secured Obligations under laws applicable to such Lender which are presently in effect or, to the extent allowed by law, under such applicable laws which may hereafter be in effect and which allow a higher maximum non-usurious interest rate than applicable laws allow as of the date hereof.
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Holdings” has the meaning assigned to such term in the recitals.
Hydrocarbon Interests” means all rights, titles, interests and estates now or hereafter acquired in and to oil and gas leases, oil, gas and mineral leases, or other liquid or gaseous hydrocarbon leases, mineral fee interests, overriding royalty and royalty interests, net profit interests and production payment interests, including any reserved or residual interests of whatever nature. Unless otherwise indicated herein, each reference to the term “Hydrocarbon Interests” shall mean Hydrocarbon Interests of the Borrower and the Restricted Subsidiaries, as the context requires.
Hydrocarbons” means oil, gas, casinghead gas, drip gasoline, natural gasoline, condensate, distillate, liquid hydrocarbons, gaseous hydrocarbons and all products refined or separated therefrom and all other minerals which may be produced and saved from or attributable to the Oil and Gas Properties of the Credit Parties, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests of the Credit Parties or other properties constituting Oil and Gas Properties of the Credit Parties.
Immaterial Subsidiary” shall mean any Restricted Subsidiary that is not a Material Subsidiary.
Impacted Interest Period” has the meaning assigned to such term in the definition of LIBO Rate.
Indemnified Taxes” means (a) Taxes, other than Excluded Taxes, imposed on or with respect to any payment made by or on account of any obligation of any Credit Party under any Loan Document, and (b) to the extent not otherwise described in clause (a), Other Taxes.
Indemnitee” has the meaning assigned to such term in Section 12.03(b).
Information” has the meaning assigned to such term in Section 12.11.
Initial Reserve Report” means the Borrower’s internally prepared update effective as of August 1, 2021, to the Borrower’s most recently delivered third-party reserve report, prepared by the Borrower with respect to the oil and gas reserves attributable to the Oil and Gas Properties of the Borrower and the Restricted Subsidiaries.
Insolvency Proceeding” means any case or proceeding commenced by or against a Person under any state, federal or foreign law for, or any agreement of such Person to, (a) the entry of an order for relief under the Bankruptcy Code, or any other insolvency, debtor relief or debt adjustment law; (b) the appointment of a receiver, trustee, liquidator, administrator, conservator or other custodian for such Person or any part of its Property; or (c) an assignment or trust mortgage for the benefit of creditors.
Intellectual Property” shall mean the collective reference to all rights, priorities and privileges relating to intellectual property, whether arising under United States of America, state, multinational or foreign laws or otherwise, including, without limitation, copyrights, copyright licenses, patents, patent licenses, trademarks, trademark licenses, service-marks, technology, know-how and processes, recipes, formulas, trade secrets, and all rights to sue at law or in equity for any infringement or other impairment thereof, including the right to receive all proceeds and damages therefrom.
Interest Election Request” means a request by the Borrower to convert or continue a Borrowing in accordance with Section 2.04 in substantially the form of Exhibit F.
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Interest Expense” means, for any period, the sum (determined without duplication) of the aggregate gross interest expense of the Borrower and the Consolidated Restricted Subsidiaries for such period, including (a) to the extent included in interest expense under GAAP, unless otherwise provided in (iii) below: (i) amortization of debt discount, (ii) capitalized interest and (iii) the portion of any payments or accruals under Capital Leases allocable to interest expense, plus the portion of any payments or accruals under Synthetic Leases allocable to interest expense whether or not the same constitutes interest expense under GAAP and (b) cash dividend payments made by any Credit Party or the Restricted Subsidiaries in respect of any Disqualified Capital Stock; but excluding non-cash gains, losses or adjustments under FASB ASC Topic 815 as a result of changes in the fair market value of derivatives.
Interest Payment Date” means (a) with respect to any ABR Loan, the last day of each March, June, September and December and, (b) with respect to any EurodollarRFR Loan, each date that is on the numerically corresponding day in each calendar month that is one month after the Borrowing of such Loan (or, if there is no such numerically corresponding day in such month, then the last day of such month), and (c) with respect to any Term Benchmark Loan, the last day of the Interest Period applicable to the Borrowing of which such Loan is a part and, in the case of a EurodollarTerm Benchmark Borrowing with an Interest Period of more than three months’ duration, each day prior to the last day of such Interest Period that occurs at intervals of three months’ duration after the first day of such Interest Period.
Interest Period” means with respect to any EurodollarTerm Benchmark Borrowing, the period commencing on the date of such Borrowing and ending on the numerically corresponding day in the calendar month that is one month (or, in the case of the initial funding on the Effective Date, such shorter period as the Borrower and the Administrative Agent may mutually agree), three months or six months (or, with the consent of each Lender, twelve months) thereafter, as the Borrower may elect (in each case, subject to the availability for the Benchmark applicable to the relevant Loan or Commitment); provided, that (a) if any Interest Period would end on a day other than a Business Day, such Interest Period shall be extended to the next succeeding Business Day unless such next succeeding Business Day would fall in the next calendar month, in which case such Interest Period shall end on the next preceding Business Day, (b) any Interest Period that commences on the last Business Day of a calendar month (or on a day for which there is no numerically corresponding day in the last calendar month of such Interest Period) shall end on the last Business Day of the last calendar month of such Interest Period and (c) no tenor that has been removed from this definition pursuant to Section 3.03(fe) shall be available for specification in such Borrowing Request or Interest Election Request. For purposes hereof, the date of a Borrowing initially shall be the date on which such Borrowing is made and thereafter shall be the effective date of the most recent conversion or continuation of such Borrowing.
Interim Redetermination” has the meaning assigned to such term in Section 2.07(b).
Interim Redetermination Date” means the date on which a Borrowing Base that has been redetermined pursuant to an Interim Redetermination becomes effective as provided in Section 2.07(d).
Interpolated Rate” means, at any time, for any Interest Period, the rate per annum (rounded to the same number of decimal places as the LIBO Screen Rate) determined by the Administrative Agent (which determination shall be conclusive and binding absent manifest error) to be equal to the rate that results from interpolating on a linear basis between: (a) the LIBO Screen Rate for the longest period for which the LIBO Screen Rate is available that is shorter than the Impacted Interest Period; and (b) the LIBO Screen Rate for the shortest period (for which that LIBO Screen Rate is available) that exceeds the Impacted Interest Period, in each case, at such time.
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Investment” means, for any Person: (a) any direct or indirect acquisition (whether for cash, Property, services or securities or otherwise) of Equity Interests of any other Person; (b) the making of any deposit, advance, loan or capital contribution to, assumption of Debt of, purchase or other acquisition of any other Debt or equity participation or interest in, or other extension of credit to, any other Person (including the purchase of Property from another Person subject to an understanding or agreement, contingent or otherwise, to resell such Property to such Person, but excluding any such advance, loan or extension of credit having a term not exceeding ninety (90) days representing the purchase price of inventory or supplies sold by such Person in the ordinary course of business); (c) the purchase or acquisition (in one or a series of transactions) of Property of another Person that constitutes a business unit, line of business or division of such Person; or (d) the entering into of any guarantee of, or other contingent obligation (including the deposit of any Equity Interests to be sold) with respect to, Debt or other obligations of any other Person and (without duplication) any amount committed to be advanced, lent, or extended to such Person (valued at the lesser of the amount of the Debt that is the subject of such guarantee or contingent obligation and the maximum stated amount of such guarantee or contingent obligation).
IRS” means the United States Internal Revenue Service.
ISDA Definitions” means the 2006 ISDA Definitions published by the International Swaps and Derivatives Association, Inc. or any successor thereto, as amended or supplemented from time to time, or any successor definitional booklet for interest rate derivatives published from time to time by the International Swaps and Derivatives Association, Inc. or such successor thereto.
Issuing Bank” means (a) each of JPMorgan, Citizens Bank, N.A., Fifth Third Bank National Association, MUFG Bank, Ltd., and Wells Fargo Bank, N.A., (b) with respect to Existing Letters of Credit, the Existing Issuing Bank, and (c) any other Lender reasonably acceptable to the Administrative Agent and the Borrower that has agreed in its sole discretion to become an Issuing Bank hereunder pursuant to documentation in form and substance reasonably satisfactory to the Administrative Agent, in each case, in its capacity as an issuer of Letters of Credit hereunder, and its successors in such capacity as provided in Section 2.08(i). Any Issuing Bank may, in its discretion, arrange for one or more Letters of Credit to be issued by Affiliates of such Issuing Bank, in which case the term “Issuing Bank” shall include any such Affiliate with respect to Letters of Credit issued by such Affiliate. Each reference herein to the “Issuing Bank” shall be deemed to be a reference to the relevant Issuing Bank.
JPMorgan” has the meaning assigned to such term in the preamble.
LC Commitment” means, with respect to each Issuing Bank, the commitment of such Issuing Bank to issue Letters of Credit hereunder. The initial amount of each Issuing Bank’s LC Commitment is set forth on Annex II, or if an Issuing Bank has entered into an Assignment and Assumption or has otherwise assumed a LC Commitment after the Effective Date, the amount set forth for such Issuing Bank as its LC Commitment in the Register maintained by the Administrative Agent. The LC Commitment of any Issuing Bank may be increased or decreased with the consent of the Administrative Agent (not to be unreasonably withheld, conditioned or delayed) as agreed by the Borrower and such Issuing Bank.
LC Disbursement” means a payment made by any Issuing Bank pursuant to a Letter of Credit issued by such Issuing Bank.
LC Exposure” means, at any time, the sum of (a) the aggregate undrawn amount of all outstanding Letters of Credit at such time plus (b) the aggregate amount of all LC Disbursements that have not yet been reimbursed by or on behalf of the Borrower at such time. The LC
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Exposure of any Lender at any time shall be its Applicable Percentage of the total LC Exposure at such time.
LC Maturity Date” means the date that is five (5) Business Days prior to the Maturity Date.
Lender Parent” means, with respect to any Lender, any Person as to which such Lender is, directly or indirectly, a subsidiary.
Lender Party” means the Administrative Agent, each Issuing Bank or any Lender.
Lenders” means the Persons listed on Annex I, other than any such Person that ceases to be a party hereto pursuant to an Assignment and Assumption, and any Person that shall have become a party hereto pursuant to an Assignment and Assumption.
Letter of Credit” means any standby letter of credit issued pursuant to this Agreement, including the Existing Letters of Credit.
Letter of Credit Agreements” means all letter of credit applications and other agreements (including any amendments, modifications or supplements thereto) submitted by the Borrower, or entered into by the Borrower, with any Issuing Bank relating to any Letter of Credit issued by such Issuing Bank.
LIBOR” has the meaning assigned to such term in Section 1.07.
LIBO Rate” means, with respect to any Eurodollar Borrowing for any Interest Period, the LIBO Screen Rate at approximately 11:00 a.m., London time, two Business Days prior to the commencement of such Interest Period; provided that if the LIBO Screen Rate shall not be available at such time for such Interest Period (an “Impacted Interest Period”) then the LIBO Rate shall be the Interpolated Rate.
LIBO Screen Rate” means, for any day and time, with respect to any Eurodollar Borrowing for any Interest Period, the London interbank offered rate as administered by ICE Benchmark Administration (or any other Person that takes over the administration of such rate for U.S. Dollars) for a period equal in length to such Interest Period as displayed on such day and time on pages LIBOR01 or LIBOR02 of the Reuters screen that displays such rate (or, in the event such rate does not appear on a Reuters page or screen, on any successor or substitute page on such screen that displays such rate, or on the appropriate page of such other information service that publishes such rate from time to time as selected by the Administrative Agent in its reasonable discretion); provided that if the LIBO Screen Rate as so determined would shall be less than zero, such rate shall be deemed to be zero for the purposes of this Agreement.
Lien” means any interest in Property securing an obligation owed to, or a claim by, a Person other than the owner of the Property, whether such interest is based on the common law, statute or contract, and whether such obligation or claim is fixed or contingent, and including but not limited to (a) the lien or security interest arising from a deed of trust, mortgage, encumbrance, pledge, security agreement, conditional sale or trust receipt or a lease, consignment or bailment for security purposes or (b) production payments and the like payable out of Oil and Gas Properties. The term “Lien” shall include easements, restrictions, servitudes, permits, restrictive covenants, exceptions or reservations in each case with respect to real property. For the purposes of this Agreement, the Credit Parties and the Restricted Subsidiaries shall be deemed to be the owner of any Property which they have acquired or hold subject to a conditional sale agreement, or leases under a financing lease or other arrangement pursuant to
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which title to the Property has been retained by or vested in some other Person in a transaction intended to create a financing.
Liquidate” means, with respect to any Swap Agreement, (a) the sale, assignment, novation, unwind, termination or other monetization of all or any part of such Swap Agreement or (b) the creation of an offsetting position against all or any part of such Swap Agreement, other than, in each case, solely with respect to Swap Agreements in existence as of the Effective Date, any novations thereof on or after the Effective Date or restructurings thereof that do not increase the Borrower’s net economic exposure to the relevant commodity. The terms “Liquidated” and “Liquidation” have correlative meanings thereto.
Loan Documents” means this Agreement, the Notes, the Letter of Credit Agreements, the Letters of Credit, the Assignment of Secured Indebtedness, the Security Instruments, the Fee Letter and any other document, instrument or agreement (other than Secured Swap Agreements or Secured Cash Management Agreements) now or hereafter delivered by or on behalf of a Credit Party under this Agreement.
Loans” means the Loans made by the Lenders to the Borrower pursuant to this Agreement.
Majority Lenders” means, at any time while no Loans or LC Exposure are outstanding, Lenders having more than fifty percent (50.0%) of the sum of the Aggregate Maximum Revolving Credit Amounts; and at any time while any Loans or LC Exposure are outstanding, Lenders holding more than fifty percent (50.0%) of the outstanding aggregate principal amount of the Loans and participation interests in Letters of Credit (without regard to any sale by a Lender of a participation in any Loan under Section 12.04(c)); provided that, if at any time there are two or fewer Lenders, then all Lenders shall constitute the Majority Lenders; provided further that the Maximum Revolving Credit Amount and the outstanding principal amount of the Loans of, and the participation interests in Letters of Credit held by, each Defaulting Lender (if any) shall be excluded from the determination of Majority Lenders to the extent set forth in Section 4.04(b)(ii).
Material Acquisition” means any acquisition of Property or series of related acquisitions of Property that involves the payment of consideration by the Borrower and the Consolidated Restricted Subsidiaries in excess of $50,000,000.
Material Adverse Effect” means a material adverse change in, or material adverse effect on (a) the business, operations, Property or financial condition of the Credit Parties, taken as a whole, (b) the ability of the Credit Parties, taken as a whole, to perform their obligations under the Loan Documents (including payment obligations), (c) the validity or enforceability of any Loan Document or (d) the rights and remedies of the Administrative Agent, any Issuing Bank or any Lender under the Loan Documents.
Material Debt” means any Debt (other than the Loans and Letters of Credit), or obligations in respect of one or more Swap Agreements, of any one or more of the Credit Parties and the Restricted Subsidiaries, in an aggregate principal amount exceeding $30,000,000. For purposes of determining Material Debt, the “principal amount” of the obligations of the Credit Parties and the Restricted Subsidiaries in respect of any Swap Agreement at any time shall be the Swap Termination Value of such Swap Agreement.
Material Disposition” means any Disposition of Property or series of related Dispositions of Property that yields gross proceeds to the Borrower and the Consolidated Restricted Subsidiaries in excess of $50,000,000.
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Material Gas Imbalance” means, with respect to all Gas Balancing Agreements to which any Credit Party is a party or by which any Hydrocarbon Interest owned by any Credit Party is bound, a net gas imbalance to Borrower or any other Credit Party, individually or taken as a whole exceeding one half bcf of gas (stated on an mcf equivalent basis) with respect to the Credit Parties’ Oil and Gas Properties. Gas imbalances will be determined based on written agreements, if any, specifying the method of calculation thereof, or, alternatively, if no such agreements are in existence, gas imbalances will be calculated by multiplying (x) the volume of gas imbalance as of the date of calculation (expressed in thousand cubic feet) by (y) the heating value in BTU’s per thousand cubic feet, times the Henry Hub average daily spot price for the month immediately preceding the date of calculation, adjusted for location differential and transportation costs based on the location where the Hydrocarbon Interests giving rise to the imbalances are located.
Material Subsidiary” means, as of any date, any Restricted Subsidiary (a) that owns or has an interest in any Property assigned value in the Borrowing Base then in effect, as determined by the Administrative Agent; (b) that has any outstanding Debt for borrowed money or guarantees any Permitted Debt, any Permitted Refinancing Debt or the Debt of any other Person; or (c) that contributed greater than (i) two and a half percent (2.5%) of EBITDAX for the period of four consecutive fiscal quarters most recently ended for which financial statements have been delivered pursuant to Section 8.01(a) or Section 8.01(b) or (ii) two and a half percent (2.5%) of Consolidated Total Assets as of the last day of the most recent fiscal quarter for which financial statements have been delivered pursuant to Section 8.01(a) or Section 8.01(b); provided that, if at any time the aggregate amount of EBITDAX or Consolidated Total Assets attributable to all Restricted Subsidiaries that are not Material Subsidiaries exceeds five percent (5.0%) of EBITDAX for any such period or five percent (5.0%) of Consolidated Total Assets as of the last day of any such fiscal quarter, then the Borrower shall (or, in the event the Borrower has failed to do so, the Administrative Agent shall), on the date on which financial statements for such fiscal quarter are delivered pursuant to Section 8.01(a) or Section 8.01(b), designate in writing to the Administrative Agent one or more of such Restricted Subsidiaries as “Material Subsidiaries” to eliminate any such excess, and such designated Subsidiaries shall for all purposes of this Agreement constitute Material Subsidiaries.
Maturity Date” means October 14, 2025.
Maximum Revolving Credit Amount” means, as to each Lender, the amount set forth opposite such Lender’s name on Annex I under the caption “Maximum Revolving Credit Amounts”, as the same may be (a) reduced or terminated from time to time in connection with a reduction or termination of the Aggregate Maximum Revolving Credit Amounts pursuant to Section 2.06(b), (b) modified from time to time pursuant to any assignment permitted by Section 12.04(b), or (c) otherwise modified pursuant to the terms of this Agreement (including Section 2.07 hereof).
Measurement Period” means, (a) with respect to each fiscal quarter ending on September 30, 2021, December 31, 2021, and March 31, 2022, the period commencing on July 1, 2021, and ending on the last day of such fiscal quarter then ended and (b) with respect to any fiscal quarter ending on or after March 31, 2022, the four fiscal quarter period then ended.
Midstream Dispute” means the motion to reject the negotiated rate firm transportation agreement with Rover Pipeline, LLC, which is currently pending before the U.S. District Court for the Southern District of Texas, Houston Division following the withdrawal of the reference from the Bankruptcy Court under case number Bankruptcy No. 20-35562, Civil Action No. H-21-232.
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Moody’s” means Moody’s Investors Service, Inc. and any successor thereto that is a nationally recognized rating agency.
Mortgage” means each mortgage, deed of trust or any other document creating and evidencing a Lien on real Property and other Property in favor of the Administrative Agent, for the benefit of the Secured Parties, which shall be in form and substance reasonably satisfactory to the Administrative Agent, each as amended or otherwise modified, including pursuant to the Security Instrument Assignments contemplated on the Effective Date.
Mortgaged Property” means any Property owned by the Borrower or any Guarantor which is subject to a Mortgage.
Multiemployer Plan” means a multiemployer plan as defined in Section 3(37) of ERISA to which any Credit Party or any ERISA Affiliate is making or accruing an obligation to make contributions, or has within the six calendar years preceding any relevant date, made or accrued an obligation to make contributions and liability to a Credit Party remains.
Net Funded Leverage Ratio” means, with respect to the Borrower and its Consolidated Restricted Subsidiaries, as of any date of determination, the ratio of (a) Total Net Funded Debt as of such date to (b) EBITDAX for the period of four consecutive fiscal quarters ending on such date (or in the case of fiscal quarters ending on or before March 31, 2022, Annualized EBITDAX).
New Borrowing Base Notice” has the meaning assigned to such term in Section 2.07(d).
Non-Consenting Lender” means any Lender that does not approve any consent, waiver, discharge, termination or amendment to any provision of this Agreement or any other Loan Document requested by the Borrower (including any increase, reaffirmation or decrease in the Borrowing Base) that (i) requires the approval of all Lenders or all affected Lenders in accordance with the terms of Section 2.07 or Section 12.02(b) and (ii) has been approved by the Majority Lenders.
Non-Defaulting Lender” means, at any time, each Lender that is not a Defaulting Lender at such time.
Notes” means the Revolving Credit Notes of the Borrower described in Section 2.02(d) and being substantially in the form of Exhibit A, together with all amendments, modifications, replacements, extensions and rearrangements thereof.
NYFRB” means the Federal Reserve Bank of New York (or any successor thereto).
“NYFRB’s Website” means the website of the NYFRB at http://www.newyorkfed.org, or any successor source.
NYFRB Rate” means, for any day, the greater of (a) the Federal Funds Effective Rate in effect on such day and (b) the Overnight Bank Funding Rate in effect on such day (or for any day that is not a Business Day, for the immediately preceding Business Day); provided that if none of such rates are published for any day that is a Business Day, the term “NYFRB Rate” means the rate for a federal funds transaction quoted at 11:00 a.m. on such day received by the Administrative Agent from a federal funds broker of recognized standing selected by it; provided, further, that if any of the aforesaid rates as so determined be less than zero, such rate shall be deemed to be zero for purposes of this Agreement.
OFAC” means the U.S. Department of the Treasury’s Office of Foreign Assets Control.
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Oil and Gas Properties” means (a) Hydrocarbon Interests; (b) the Properties now or hereafter pooled or unitized with Hydrocarbon Interests; (c) all presently existing or future unitization, pooling agreements and declarations of pooled units and the units created thereby (including without limitation all units created under orders, regulations and rules of any Governmental Authority) which may affect all or any portion of the Hydrocarbon Interests; (d) all operating agreements, contracts and other agreements, including production sharing contracts and agreements, which relate to any of the Hydrocarbon Interests or the lands pooled or unitized therewith, or the production, sale, purchase, exchange, treatment, processing, handling, storage, transporting or marketing of Hydrocarbons from or attributable to such Hydrocarbon Interests or the lands pooled or unitized therewith; (e) all Hydrocarbons in and under and which may be produced and saved or attributable to the Hydrocarbon Interests or the lands pooled or unitized therewith, including all oil in tanks, and all rents, issues, profits, proceeds, products, revenues and other incomes from or attributable to the Hydrocarbon Interests or the lands pooled or unitized therewith; (f) all tenements, hereditaments, appurtenances and Properties in any manner appertaining, belonging, affixed or incidental to the Hydrocarbon Interests or the lands pooled or unitized therewith and (g) all Properties, rights, titles, interests and estates, real or personal, now owned or hereafter acquired and situated upon, or used, held for use or useful in connection with the operating, working or development of any of such Hydrocarbon Interests (excluding drilling rigs, automotive equipment, rental equipment or other personal Property which may be on such premises for the purpose of drilling a well or for other similar temporary uses) or the lands pooled or unitized therewith, or with the production, sale, purchase, exchange, treatment, processing, handling, storage, transporting or marketing of Hydrocarbons from or attributable to such Hydrocarbon Interests or the lands pooled or unitized therewith, including any and all oil wells, gas wells, injection wells or other wells, buildings, structures, fuel separators, liquid extraction plants, plant compressors, pumps, pumping units, pipelines, sales and flow lines, gathering lines and systems, field gathering systems, salt water disposal facilities, tanks and tank batteries, processing plants, fixtures, valves, fittings, machinery and parts, engines, boilers, meters, apparatus, equipment, facilities, appliances, tools, implements, cables, wires, towers, casing, tubing and rods, surface leases, rights-of-way, easements, servitudes, licenses and other surface and subsurface rights together with all additions, substitutions, replacements, accessions and attachments to any and all of the foregoing. Unless otherwise indicated herein, each reference to the term “Oil and Gas Properties” shall mean Oil and Gas Properties of the Borrower and the Restricted Subsidiaries.
Old Borrower” means Gulfport Energy Corporation (as in existence prior to the Bankruptcy Exit Date).
“Ongoing Hedges” has the meaning assigned to such term in Section 9.16(a)(i).
Organizational Documents” means, with respect to any Person, its charter, certificate or articles of incorporation or formation, bylaws, articles of organization, limited liability agreement, operating agreement, members agreement, shareholders agreement, partnership agreement, certificate of partnership, certificate of formation, voting trust agreement, or similar agreement or instrument governing the formation or operation of such Person, including any of the foregoing in connection with the Preferred Equity.
Other Benchmark Rate Election” means, if the then-current Benchmark is the LIBO Rate, the occurrence of:
(a) a request by the Borrower to the Administrative Agent to notify each of the other parties hereto that, at the determination of the Borrower, dollar-denominated syndicated credit facilities at such time contain (as a result of amendment or as originally executed), in lieu of a LIBOR-based rate, a term benchmark rate as a benchmark rate, and
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(b) the Administrative Agent, in its sole discretion, and the Borrower jointly elect to trigger a fallback from the LIBO Rate and the provision, as applicable, by the Administrative Agent of written notice of such election to the Borrower and the Lenders.
Other Connection Taxes” means, with respect to any Recipient, Taxes imposed as a result of a present or former connection between such Recipient and the jurisdiction imposing such Tax (other than connections arising from such Recipient having executed, delivered, become a party to, performed its obligations under, received payments under, received or perfected a security interest under, engaged in any other transaction pursuant to or enforced any Loan Document, or sold or assigned an interest in any Loan or Loan Document).
Other Taxes” means all present or future stamp, court or documentary, intangible, recording, filing or similar Taxes that arise from any payment made under, from the execution, delivery, performance, enforcement or registration of, from the receipt or perfection of a security interest under, or otherwise with respect to any Loan Document, except any such Taxes that are Other Connection Taxes imposed with respect to an assignment (other than an assignment made pursuant to Section 5.04(b)).
Overnight Bank Funding Rate” means, for any day, the rate comprised of both overnight federal funds and overnight Eurodollar borrowingseurodollar transactions denominated in dollars by U.S.-managed banking offices of depository institutions, as such composite rate shall be determined by the NYFRB as set forth on the Federal Reserve Bank of New York’sNYFRB’s Website from time to time, and published on the next succeeding Business Day by the NYFRB as an overnight bank funding rate.
Participant” has the meaning assigned to such term in Section 12.04(c).
Participant Register” has the meaning assigned to such term in Section 12.04(c).
Patriot Act” has the meaning assigned to such term in Section 12.16.
Payment” has the meaning assigned to such term in Section 11.12(a).
Payment in Full” means the date of the occurrence of the last to occur of the following events: (i) the expiration or termination of the Revolving Credit Commitments and Aggregate Maximum Revolving Credit Amounts, (ii) the payment in full, in cash, of the outstanding principal of, and accrued and unpaid interest on, all Loans, (iii) the payment in full, in cash, of fees and other Secured Obligations (other than contingent indemnity obligations for which no claim has been made, Secured Cash Management Obligations and other Secured Obligations described in the following clauses (iv) through (vi)), (iv) the expiration or termination or collateralization (in a manner reasonably acceptable to the applicable Issuing Bank) of all outstanding Letters of Credit, (v) the reimbursement by the Borrower of all LC Disbursements, and (vi) either (A) the expiration or termination of all Secured Swap Agreements and the payment of all amounts thereunder to the Secured Swap Parties and written notice from the Borrower to the Administrative Agent that such payment has occurred, or (B) the collateralization or other arrangements having been made satisfactory to the applicable Secured Swap Parties in their respective reasonable discretion and written notice from the Borrower to the Administrative Agent that the such collateralization or other satisfactory arrangements have been made.
Payment Notice” has the meaning assigned to such term in Section 11.12(b).
Payment Recipient” has the meaning assigned to such term in Section 11.12(a).
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PBGC” means the Pension Benefit Guaranty Corporation, or any successor thereto.
Permitted Debt” means Permitted Senior Notes, Senior Unsecured 2026 Notes and any Permitted Refinancing Debt thereof.
Permitted Holder” means each of the Persons identified on Schedule 1.02(b) and their respective Affiliates (other than Affiliate portfolio companies).
Permitted Refinancing Debt” means senior or senior subordinated Debt or Debt securities (whether registered or privately placed and whether convertible into Equity Interests or not), in each case whether secured or unsecured, issued or incurred by the Borrower (for purposes of this definition, “new Debt”) incurred in exchange for, or proceeds of which are used to refinance, refund, renew, replace or extend all or any portion of any Permitted Debt (the “Refinanced Debt”); provided that (a) [reserved]; (b) such new Debt is in an aggregate principal amount not in excess of the aggregate principal amount then outstanding of the Refinanced Debt, plus an amount necessary to pay accrued and unpaid interest and any fees and expenses, including premiums (and, for the avoidance of doubt, make-whole amounts) related to such exchange, refinancing, refunding, renewal, replacement or extension and original issue discount, related to such new Debt; (c) such new Debt does not have any scheduled principal amortization prior to the date that is 180 days after the Maturity Date as in effect on the date of determination; (d) such new Debt does not mature sooner than the date that is 180 days after the Maturity Date as in effect on the date of determination; (e) no Subsidiary or other Person shall guarantee such new Debt unless such Subsidiary or other Person has guaranteed the Secured Obligations pursuant to the Guaranty and Collateral Agreement; (f) the terms and conditions of such new Debt and any guarantees thereof, taken as a whole, are not materially less favorable to the Borrower and its Restricted Subsidiaries as market terms for issuers of similar size and credit quality given the then prevailing market conditions as reasonably determined by the Borrower in good faith and are not more restrictive, taken as a whole, than those contained in this Agreement and the other Loan Documents or the Refinanced Debt, as reasonably determined by the Borrower in good faith; (g) if such new Debt is senior subordinated Debt, such Debt is expressly subordinate to the Payment in Full on customary terms and conditions; or (h) if the Refinanced Debt is unsecured, such new Debt shall be unsecured.
Permitted Senior Notes” means any unsecured senior or unsecured senior subordinated Debt securities (whether registered or privately placed and whether convertible into Equity Interests or not) issued or incurred by the Borrower, as issuer, to the extent permitted by Section 9.02(f).
Person” means any natural person, corporation, limited liability company, trust, joint venture, association, company, partnership, Governmental Authority or other entity of whatever nature.
Plan” means any employee pension benefit plan, as defined in Section 3(2) of ERISA, that is subject to Title IV of ERISA or Section 412 of the Code, other than a Multiemployer Plan, which (a) is currently or during the period of applicability of this Agreement sponsored, maintained or contributed to by a Credit Party or an ERISA Affiliate or (b) was at any time during the six calendar years preceding the date of any relevant period, sponsored, maintained or contributed to by a Credit Party or an ERISA Affiliate if liability to a Credit Party remains.
“Platform” has the meaning assigned to such term in Section 12.01(d)(i).
Preferred Equity” means the shares of Series A Convertible Preferred Stock, par value $0.0001 per share, of the Borrower, designated pursuant to the Borrower’s Amended and Restated Certificate of Incorporation on the Bankruptcy Exit Date.
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Prime Rate” means the rate of interest last quoted by The Wall Street Journal as the “Prime Rate” in the U.S. or, if The Wall Street Journal ceases to quote such rate, the highest per annum interest rate published by the Federal Reserve Board in Federal Reserve Statistical Release H.15 (519) (Selected Interest Rates) as the “bank prime loan” rate or, if such rate is no longer quoted therein, any similar rate quoted therein (as determined by the Administrative Agent) or any similar release by the Federal Reserve Board (as determined by the Administrative Agent). Each change in the Prime Rate shall be effective from and including the date such change is publicly announced or quoted as being effective.
Pro Forma Net Leverage Ratio” means, with respect to the Borrower and its Consolidated Restricted Subsidiaries, as of any date of determination, the ratio of (a) Total Net Funded Debt as of such date determined on a pro forma basis after giving effect to any applicable transactions that occurred after the last day of the Borrower’s most recently ended fiscal quarter for which financial statements were delivered, including any transactions to occur on such date, to (b) EBITDAX for the period of four consecutive fiscal quarters most recently ended prior to such date for which financial statements have been delivered pursuant to Section 8.01(a) or Section 8.01(b) (or in the case of fiscal quarters ending on or before March 31, 2022, Annualized EBITDAX) determined on a pro forma basis after giving effect to any applicable transactions that occurred after the last day of the Borrower’s most recently ended fiscal quarter for which financial statements were delivered, including any transactions to occur on such date.
Property” means any interest in any kind of property or asset, whether real, personal or mixed, or tangible or intangible, including, without limitation, cash, securities, accounts and contract rights.
“Proposed Acquisition” has the meaning assigned to such term in Section 9.16(a)(ii).
Proposed Borrowing Base” has the meaning assigned to such term in Section 2.07(c)(i).
Proposed Borrowing Base Notice” has the meaning assigned to such term in Section 2.07(c)(ii).
proved”, with respect to any Oil and Gas Properties, has the meaning assigned to the term “Proved Reserves” in the Definitions of Oil and Gas Reserves as promulgated by the Society of Petroleum Engineers (or any generally recognized successor) as in effect at the time in question.
Proved Reserves” has the meaning assigned to the term “Proved Reserves” in the Definitions of Oil and Gas Reserves (in this paragraph, the “Definitions”) as promulgated by the Society of Petroleum Engineers (or any generally recognized successor) as in effect at the time in question.
Proved Developed Producing Reserves” means Proved Reserves which are categorized as both “Developed” and “Producing” in the Definitions.
PTE” means a prohibited transaction class exemption issued by the U.S. Department of Labor, as any such exemption may be amended from time to time.
Public Lender” shall mean any Lender that does not wish to receive material non-public information with respect to the Borrower, any of the other Credit Parties, or their securities for purposes of United States Federal or state securities laws.
Purchase Money Obligation” shall mean, for any Person, the obligations of such Person in respect of Debt (including Capital Lease Obligations) incurred for the purpose of financing all
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or any part of the purchase price of any fixed or capital assets or the cost of installation, construction or improvement of any fixed or capital assets; provided, however, that (i) such Debt is incurred within 90 days after such acquisition, installation, construction or improvement of such fixed or capital assets by such Person and (ii) the amount of such Debt does not exceed the lesser of one hundred percent (100%) of the fair market value of such fixed or capital asset or the cost of the acquisition, installation, construction or improvement thereof, as the case may be.
PV-10” means, on any date of determination, with respect to any Proved Reserves expected to be produced from any Borrowing Base Properties, the net present value, discounted at 10% per annum, of the future net revenues expected to accrue to the Borrower’s and its Restricted Subsidiaries’ collective interests in such reserves during the remaining expected economic lives of such Proved Reserves, calculated in accordance with the Bank Price Deck.
“QFC” has the meaning assigned to the term “qualified financial contract” in, and shall be interpreted in accordance with, 12 U.S.C. 5390(c)(8)(D).
“QFC Credit Support” has the meaning assigned to it in Section 12.25.
Qualifying Net Cash Proceeds” means, during the period of sixty (60) days after an offering of Equity Interests (other than Disqualified Capital Stock) of Holdings that does not constitute or result in a Change in Control, the net cash proceeds thereof, minus the aggregate amount of such net cash proceeds utilized during such sixty (60) day period to make any Restricted Payments pursuant to Sections 9.04(a)(iii)(y), Redemptions pursuant to Section 9.04(b)(i)(x)(B) or Investments pursuant to Section 9.05(d)(ii); provided that after such sixty (60) day period, the Qualifying Net Cash Proceeds of such offering shall be deemed to equal $0.
Recipient” means (a) the Administrative Agent, (b) any Lender and (c) any Issuing Bank, as applicable.
Redemption” means with respect to any Debt, the repurchase, redemption, payment, prepayment, repayment or defeasance or any other acquisition or retirement for value or satisfaction prior to the scheduled maturity thereof in any manner (or the segregation of funds with respect to any of the foregoing) of any such Debt. “Redeem” has the correlative meaning thereto.
Reference Period” has the meaning assigned to such term in the definition of EBITDAX.
Reference Time” with respect to any setting of the then-current Benchmark, means (a1) if such Benchmark is LIBOthe Term SOFR Rate, 11:00 a.m. (London5:00 a.m. (Chicago time) on the day that is two London banking daysBusiness Days preceding the date of such setting, or (b2) if such Benchmark is not the LIBO RateDaily Simple SOFR, then four Business Days prior to such setting or (3) if such Benchmark is none of the Term SOFR Rate or Daily Simple SOFR, the time determined by the Administrative Agent in its reasonable discretion.
Refinanced Debt” has the meaning assigned to such term in the definition of Permitted Refinancing Debt.
Register” has the meaning assigned to such term in Section 12.04(b)(iv).
Regulation D” means Regulation D of the Federal Reserve Board, as the same may be amended, supplemented or replaced from time to time.
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Related Parties” means, with respect to any specified Person, such Person’s Affiliates and the respective directors, officers, employees, agents and advisors (including attorneys, accountants and experts), controlling Persons, holders of Equity Interests, partners, members, trustees, managers, administrators and other representatives of such Person and such Person’s Affiliates, and the respective successors and assigns of each of the foregoing.
Release” means any spilling, leaking, pumping, pouring, emitting, emptying, discharging, injecting, escaping, leaching, dumping, or disposing into or through the environment.
Relevant Governmental Body” means the Federal Reserve Board and/or the NYFRB, the CME Term SOFR Administrator, as applicable, or a committee officially endorsed or convened by the Federal Reserve Board and/or the NYFRB or any successor thereto.
“Relevant Rate” means (a) with respect to any Term Benchmark Borrowing, the Adjusted Term SOFR Rate or (b) with respect to any RFR Borrowing, the Adjusted Daily Simple SOFR, as applicable.
Remedial Work” has the meaning assigned to such term in Section 8.10(a).
Required Lenders” means, (a) at any time while no Loans or LC Exposure are outstanding, Lenders having at least sixty-six and two-thirds percent (66-⅔%) of the Aggregate Maximum Revolving Credit Amounts; and (b) at any time while any Loans or LC Exposure are outstanding, Lenders holding at least sixty-six and two-thirds percent (66-⅔%) of the outstanding aggregate principal amount of the Loans and participation interests in Letters of Credit (without regard to any sale by a Lender of a participation in any Loan under Section 12.04(c)); provided that, if at any time there are no more than two Lenders, then all of the Lenders shall constitute the Required Lenders; provided, further, that the Maximum Revolving Credit Amount and the outstanding principal amount of the Loans of, and the participation interests in Letters of Credit held by, each Defaulting Lender (if any) shall be excluded from the determination of Required Lenders to the extent set forth in Section 4.04(b)(ii).
Reserve Report” means a report, in form and substance reasonably satisfactory to the Administrative Agent, setting forth, as of each date on or about January 1st or July 1st (or such other date in the event of an Interim Redetermination) the oil and gas reserves attributable to the Oil and Gas Properties of the Borrower and the Restricted Subsidiaries, together with a projection of the rate of production and future net income, Taxes, operating expenses (including firm transportation costs), capital expenditures and abandonment expenses with respect thereto as of such date, based upon the Strip Price on such date of determination, adjusted for historical basis differential (not including firm transportation costs), quality and gravity, without giving effect to non-property related expenses such as general and administrative expenses, debt service, future income Tax expense and depreciation, depletion and amortization; provided that in connection with any Interim Redeterminations of the Borrowing Base pursuant to the last sentence of Section 2.04(b), (i.e., as a result of the Borrower having acquired Oil and Gas Properties with Proved Reserves which are to be Borrowing Base Properties having an aggregate value in excess of 5% of the Borrowing Base in effect immediately prior to such acquisition), the Borrower shall be required, for purposes of updating the Reserve Report, to set forth only such additional Proved Reserves and related information as are the subject of such acquisition.
Reserve Report Certificate” has the meaning assigned to such term in Section 8.12(c).
Resolution Authority” means an EEA Resolution Authority or, with respect to any UK Financial Institution, a UK Resolution Authority.
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Responsible Officer” means, as to any Person, the chief executive officer, the president, any Financial Officer or any vice president of such Person (or in the case of any Person that is a partnership, of such Person’s general partner). Unless otherwise specified, all references to a Responsible Officer herein means a Responsible Officer of the Borrower.
Restricted Payment” means any dividend or other distribution (whether in cash, securities or other Property) with respect to any Equity Interests of any Credit Party or any Restricted Subsidiaries, or any payment (whether in cash, securities or other Property), including any sinking fund or similar deposit, on account of the purchase, redemption, retirement, defeasance, acquisition, cancellation or termination of any such Equity Interests or on account of any return of capital to any Credit Party’s or any Restricted Subsidiary’s stockholders, partners or members (or the equivalent of any thereof), or any option, warrant or other right to acquire any such Equity Interests in the Credit Parties or the Restricted Subsidiaries.
Restricted Subsidiary” means any Subsidiary of the Borrower that is not an Unrestricted Subsidiary.
Reuters” means, as applicable, Thomson Reuters Corp., Refinitiv, or any successor thereto.
Revolving Credit Commitment” means, with respect to each Lender, the commitment of such Lender to make Loans and to acquire participations in Letters of Credit hereunder, expressed as an amount representing the maximum aggregate amount of such Lender’s Revolving Credit Exposure hereunder as such commitment may be (a) modified from time to time pursuant to Section 2.06 and (b) modified from time to time pursuant to assignments by or to such Lender pursuant to Section 12.04(b). The amount representing each Lender’s Revolving Credit Commitment shall at any time be the least of (i) such Lender’s Maximum Revolving Credit Amount, (ii) such Lender’s Applicable Percentage of the then effective Borrowing Base and (iii) such Lender’s Elected Commitment.
Revolving Credit Exposure” means, with respect to any Lender at any time, the sum of the outstanding principal amount of such Lender’s Loans and its LC Exposure at such time.
“RFR Borrowing” means, as to any Borrowing, the RFR Loans comprising such Borrowing.
“RFR Loan” means a Loan that bears interest at a rate based on the Adjusted Daily Simple SOFR.
S&P” means S&P Global Ratings, a division of S&P Global Inc., and any successor thereto that is a nationally recognized rating agency.Standard & Poor’s Rating Services, a Standard & Poor’s Financial Services LLC business.
Sale and Leaseback Transaction” means, with respect to any Person, any arrangement, directly or indirectly, whereby such Person shall sell or transfer any Property used or useful in its business, whether now owned or hereafter acquired, and thereafter rent or lease such Property or other Property that it intends to use for substantially the same purpose or purposes as the Property being sold or transferred.
Sanctioned Country” means, at any time, a country, region or territory which is, or whose government is, itself the subject or target of any countrywide or territory-wide Sanctions (as of the date of this AgreementMay 2, 2022, the so-called Donetsk People’s Republic, the so-called Luhansk People’s Republic, the Crimea Region of Ukraine, Cuba, Iran, Syria, North Korea, and the Crimea region of UkraineSyria).
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Sanctioned Person” means, at any time, any Person with whom dealings are restricted or prohibited under Sanctions, including (a) any Person listed in any Sanctions-related list of designated or identified Persons maintained by the United States (including by OFAC, the U.S. Department of State, the U.S. Department of Treasury or the U.S. Department of Commerce), the United Nations Security Council, (b) any Person located, operating, organized or resident in, or any Governmental Authority or governmental instrumentality of, a Sanctioned Country or (c) any Person directly or indirectly owned or controlled by any Person described in clauses (a) or (b) hereof.
Sanctions” means economic or financial sanctions or trade embargoes or restrictive measures enacted, imposed, administered or enforced from time to time by (a) the U.S. government, including OFAC, the U.S. Department of State, or the U.S. Department of Commerce (b) the United Nations Security Council; or (c) any other relevant authority of a jurisdiction applicable to the Borrower, the Borrower’s Subsidiaries or any other Credit Party or its Subsidiaries.
Scheduled Redetermination” has the meaning assigned to such term in Section 2.07(b).
Scheduled Redetermination Date” means the date on which the Borrowing Base that has been redetermined pursuant to a Scheduled Redetermination becomes effective as provided in Section 2.07(d). To the extent necessary to differentiate, (a) the Schedule Redetermination Date occurring on or about May 1st is sometimes referred to herein as the “Spring Scheduled Redetermination Date” and (b) the Schedule Redetermination Date occurring on or about November 1st is sometimes referred to herein as the “Fall Scheduled Redetermination Date”.
Scotiabank” means The Bank of Nova Scotia, in its individual capacity.
SEC” means the Securities and Exchange Commission or any successor Governmental Authority.
Secured Cash Management Agreement” means a Cash Management Agreement between (a) any Credit Party or any Restricted Subsidiary and (b) a Secured Cash Management Provider.
Secured Cash Management Obligations” means any and all amounts and other obligations owing by any Credit Party or any Restricted Subsidiary to any Secured Cash Management Provider under any Secured Cash Management Agreement.
Secured Cash Management Provider” means a Lender, an Affiliate of a Lender, the Administrative Agent or an Affiliate of the Administrative Agent.
Secured Obligations” means, without duplication, any and all amounts owing or to be owing by the Borrower or any other Credit Party (whether direct or indirect (including those acquired by assumption or novation), absolute or contingent, due or to become due, now existing or hereafter arising): (i) to the Administrative Agent, the Arrangers, any Issuing Bank or any Lender or any Related Party of any of the foregoing under any Loan Document; and all renewals, extensions and/or rearrangements of any of the above, (ii) all Secured Swap Obligations and (iii) all Secured Cash Management Obligations. For the avoidance of doubt, Secured Obligations shall include all (a) principal of and premium, if any, on the Loans, (b) LC Disbursements, LC Exposure, reimbursement obligations (including, without limitation, to reimburse LC Disbursements), obligations to post cash collateral in respect of Letters of Credit and other obligations of the Credit Parties with respect to Letters of Credit, (c) interest, expenses, fees, indemnification obligations, Extraordinary Expenses and other amounts payable by the Credit Parties under Loan Documents (including, without limitation, interest accruing at the then applicable rate provided in this Agreement after the maturity of the Loans and LC Exposure and
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interest accruing at the then applicable rate provided in this Agreement after the filing of any petition in bankruptcy, or the commencement of any insolvency, reorganization or like proceeding, relating to the Credit Parties, whether or not a claim for post-filing or post-petition interest is allowed in such proceeding), (d) payments in respect of an early termination of Secured Swap Obligations, (e) erroneous Payment subrogation rights under Section 11.12(c) and (f) other Debts, amounts, fees, expenses, indemnities, costs, obligations and liabilities of any kind owing by Credit Parties pursuant to the Loan Documents, any Secured Swap Agreement or any Secured Cash Management Agreement, whether now existing or hereafter arising, whether evidenced by a note or other writing, whether allowed in any Insolvency Proceeding, whether arising from an extension of credit, issuance of a letter of credit, acceptance, loan, guaranty, indemnification or otherwise, and whether direct or indirect, absolute or contingent, due or to become due, primary or secondary, or joint or several.
Secured Parties” means, collectively, the Administrative Agent, the Lenders, the Issuing Banks, the Secured Swap Parties, the Secured Cash Management Providers and for purposes of Section 12.03(b), each Related Party thereof.
Secured Swap Agreement” means any Swap Agreement between any Credit Party and any Secured Swap Party; provided that with respect to any Secured Swap Party described in clause (c) or (d) of the definition thereof, only the Specified Swap Agreements as amended, novated or otherwise modified from time to time shall be Secured Swap Agreements.
Secured Swap Obligations” means all amounts and other obligations owing to any Secured Swap Party under any Secured Swap Agreement (other than Excluded Swap Obligations).
Secured Swap Party” means (a) any Person that entered into a Swap Agreement prior to the time such Person became, or during the time that such Person is or was, a Lender or an Affiliate of a Lender (including any such Swap Agreement in existence prior to the date hereof), even if such Person subsequently ceases to be a Lender (or an Affiliate of a Lender) for any reason, but only with respect to any transaction under such Swap Agreement entered into by such Person in effect on the date such Person ceases to be a Lender (or an Affiliate of a Lender), (b) any assignee with respect to the Swap Obligations of any Person described in clause (a) above so long as such assignee is a Lender or an Affiliate of a Lender at the time of such assignment, (c) any Person that, only in respect of the transactions under the applicable Specified Swap Agreements, is ABN AMRO BANK N.V. or any Affiliate thereof or was an Existing Lender (other than The Bank of Nova Scotia) or Affiliate thereof but is not a Lender (or Affiliate of a Lender) upon the effectiveness of this Agreement or (d) The Bank of Nova Scotia or any Affiliate thereof, so long as such Person has executed and delivered the Swap Intercreditor Agreement.
Securities Account” has the meaning assigned to such term in the UCC.
Security Instruments” means collectively (a) the Guaranty and Collateral Agreement, (b) the Mortgages, (c) each Account Control Agreement, (d) the Security Instrument Assignments and (e) any and all other agreements or instruments now or hereafter executed by the Borrower or any other Credit Party (other than Secured Swap Agreements or Secured Cash Management Agreements or participation or similar agreements between any Lender and any other lender or creditor with respect to any Secured Obligations pursuant to this Agreement) pursuant to Section 8.11 or Section 8.14 in connection with, or as security for the payment or performance of the Secured Obligations, the Notes, this Agreement, or reimbursement obligations under the Letters of Credit, as such agreements may be amended, modified, supplemented or restated from time to time.
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Security Instrument Assignments” means each assignment, amendment or other modification required by the Administrative Agent to evidence (a) the assignment of the Liens in favor of the Existing Administrative Agent to the Administrative Agent, for the benefit of the Secured Parties and (b) the continuation of such Liens as first priority, perfected Liens securing the Secured Obligations.
Senior Unsecured 2026 Notes” means the senior unsecured notes due 2026 in an aggregate amount not to exceed $550,000,000 and outstanding on the Effective Date.
SOFR” means, with respect to any Business Day, a rate per annum equal to the secured overnight financing rate for such Business Day publishedas administered by the SOFR Administrator on the SOFR Administrator’s Website on the immediately succeeding Business Day.
SOFR Administrator” means the NYFRB (or a successor administrator of the secured overnight financing rate).
SOFR Administrator’s Website” means the Federal Reserve Bank of New York’sNYFRB’s Website (or any successor source for the secured overnight financing rate identified as such by the SOFR Administrator from time to time).
“SOFR Determination Date” has the meaning specified in the definition of Daily Simple SOFR.
“SOFR Rate Day” has the meaning specified in the definition of Daily Simple SOFR.
Solvency Certificate” means the Solvency Certificate substantially in the form of Exhibit H.
Solvent” means with respect to any Person, that (a) the aggregate assets of such Person at a fair valuation exceed the aggregate Debt of such Person, (b) such Person has not incurred, and does not intend to incur, and does not believe that they will incur or have incurred Debt beyond their ability to pay such Debt (after taking into account the timing and amounts of cash to be received by such Person and the timing and amounts to be payable on or in respect of such Person’s liabilities) as such Debt becomes absolute and matures, and (c) such Person does not have (and does not have reason to believe such Person will have at any time) unreasonably small capital for the conduct of its business.
Specified Swap Agreements” means those Swap Agreements listed on Schedule 1.02(c), as such Swap Agreements may be amended, novated or otherwise modified from time to time solely to the extent of transactions arising under such Swap Agreements that were in existence on the Effective Date.
Statutory Reserve Rate” means a fraction (expressed as a decimal), the numerator of which is the number one and the denominator of which is the number one minus the aggregate of the maximum reserve percentages (including any marginal, special, emergency or supplemental reserves) expressed as a decimal established by the Federal Reserve Board to which the Administrative Agent is subject, with respect to the Adjusted LIBO Rate, for eurocurrency funding (currently referred to as “Eurocurrency Liabilities” in Regulation D of the Federal Reserve Board). Such reserve percentages shall include those imposed pursuant to such Regulation D. Eurodollar Loans shall be deemed to constitute eurocurrency funding and to be subject to such reserve requirements without benefit of or credit for proration, exemptions or offsets that may be available from time to time to any Lender under such Regulation D or any
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comparable regulation. The Statutory Reserve Rate shall be adjusted automatically on and as of the effective date of any change in any reserve percentage.
Strip Price” means, as of any date, (a) for the 60-month period commencing with the month in which such date occurs, as quoted on the New York Mercantile Exchange (the “NYMEX”) and published in a nationally recognized publication for such pricing reasonably acceptable to the Administrative Agent (as such prices may be corrected or revised from time to time by the NYMEX in accordance with its rules and regulations), the corresponding monthly quoted futures contract price for months 0–60 and (b) for periods after such 60 month period, the average corresponding monthly quoted futures contract price for months 49–60; provided, however, in the event that the NYMEX no longer provides futures contract price quotes for 60 month periods, the longest period of quotes of less than 60 months shall be used to determine the strip period and held constant thereafter based on the average of contract prices for the last twelve months of such period, and, if the NYMEX no longer provides such futures contract quotes or has ceased to operate, the Administrative Agent shall designate another nationally recognized commodities exchange to replace the NYMEX for purposes of the references to the NYMEX herein which in the Administrative Agent’s reasonable opinion is the most comparable exchange to the NYMEX at such time.
Subordinated Intercompany Note” shall mean the Subordinated Intercompany Note, substantially in the form of Exhibit M.
subsidiary” means, with respect to any Person (the “parent”) at any date, any other Person (a) of which Equity Interests representing more than 50% of the ordinary voting power for the election of the board of directors (or equivalent governing body) (irrespective of whether or not at the time Equity Interests of any other class or classes of such Person shall have or might have voting power by reason of the happening of any contingency) or, in the case of a partnership, any general partnership interests are, as of such date, owned, controlled or held, or (b) that is, as of such date, otherwise Controlled, in each case, by the parent or one or more subsidiaries of the parent or by the parent and one or more subsidiaries of the parent.
Subsidiary” means any direct or indirect subsidiary of the Borrower.
Subsidiary Guarantor” means each Restricted Subsidiary of the Borrower that is a Guarantor.
“Supported QFC” has the meaning assigned to it in Section 12.25.
Swap Agreement” means any transaction or agreement with respect to any swap, forward, future or derivative transaction or option or similar agreement, whether exchange traded, “over-the-counter” or otherwise, involving, or settled by reference to, one or more rates, currencies, commodities, emissions reduction, carbon sequestration or other environmental protection credits, equity or debt instruments or securities, or economic, financial or pricing indices or measures of economic, financial or pricing risk or value or any similar transaction or any combination of these transactions; provided that none of (i) phantom stock nor similar plans providing for payments only on account of services provided by current or former directors, officers, employees or consultants of the Credit Parties or the Restricted Subsidiaries nor (ii) the issuance of preferred stock or the issuance of Equity Interests upon conversion of any preferred stock nor (iii) capped call nor call spread arrangements entered into in connection with convertible notes otherwise permitted to be issued hereunder nor (iv) deferred purchase price or purchase price adjustment arrangements entered into in connection with any acquisition permitted hereunder shall be a Swap Agreement. Notwithstanding the foregoing, ‘Swap Agreement’ shall not include any agreement or obligation to sell, at an index-based price, any
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commodity that is intended to be physically settled and is entered into in the ordinary course as part of the Borrower’s or its Restricted Subsidiaries’ marketing business.
Swap Intercreditor Agreement” means that certain Swap Intercreditor Agreement, dated as of the date hereof, among the Borrower, the Guarantors, The Bank of Nova Scotia, as the secured swap counterparty, and the Administrative Agent, as amended or otherwise modified from time to time in accordance with Section 12.24.
Swap Intercreditor Party” means The Bank of Nova Scotia, and any of its Affiliates.
Swap Obligations” means, with respect to the Borrower or any Guarantor, any obligation to pay or perform under any agreement, contract or transaction that constitutes a “swap” within the meaning of Section 1a(47) of the Commodity Exchange Act.
Swap PV” means, with respect to any Swap Agreement, the present value as of the applicable measurement date, discounted at 9% per annum, of the future receipts expected to be paid to the Credit Parties or any Restricted Subsidiary under such Swap Agreement netted against the Bank Price Deck in effect as of the later of the Effective Date and the date of the most recent Proposed Borrowing Base Notice, as reasonably determined by the Administrative Agent; provided, however, that the “Swap PV” shall never be less than $0.00.
Swap Termination Value” means, in respect of any one or more Swap Agreements, after taking into account the effect of any legally enforceable netting agreement relating to such Swap Agreements, (i) for any date on or after the date such Swap Agreements have been closed out and termination value(s) determined in accordance therewith, such termination value(s) and (ii) for any date prior to the date referenced in clause (a), the amount(s) determined as the mark-to-market value(s) for such Swap Agreements, as determined by the counterparties to such Swap Agreements.
Synthetic Leases” means, in respect of any Person, all leases which shall have been, or should have been, in accordance with GAAP, treated as operating leases on the financial statements of the Person liable (whether contingently or otherwise) for the payment of rent thereunder and which were properly treated as indebtedness for borrowed money for purposes of United States federal income Taxes, if the lessee in respect thereof is obligated to either purchase for an amount in excess of, or pay upon early termination an amount in excess of, 80% of the residual value of the Property subject to such operating lease upon expiration or early termination of such lease.
Taxes” means any and all present or future taxes, levies, imposts, duties, deductions, charges or withholdings (including backup withholding) imposed, administered or assessed by any Governmental Authority, including any interest, additions to tax or penalties applicable thereto.
Term SOFR” means, for the applicable Corresponding Tenor as of the applicable Reference Time, the forward-looking term rate based on SOFR that has been selected or recommended by the Relevant Governmental Body.
“Term Benchmark” when used in reference to any Loan or Borrowing, refers to whether such Loan, or the Loans comprising such Borrowing, are bearing interest at a rate determined by reference to the Adjusted Term SOFR Rate, other than pursuant to clause (c) of the definition of “Alternate Base Rate”.
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Term SOFR Notice” means a notification by the Administrative Agent to the Lenders and the Borrower of the occurrence of a Term SOFR Transition Event.Determination Day” has the meaning assigned to it under the definition of Term SOFR Reference Rate.
Term SOFR Transition Event” means the reasonable determination by the Administrative Agent that (a) Term SOFR has been recommended for use by the Relevant Governmental Body, (b) the administration of Term SOFR is administratively feasible for the Administrative Agent and (c) a Benchmark Transition Event or an Early Opt-in Election, as applicable (and, for the avoidance of doubt, not in the case of an Other Benchmark Rate Election), has previously occurred resulting in a Benchmark Replacement in accordance with Section 3.03 that is not Term SOFR. Rate” means, with respect to any Term Benchmark Borrowing and for any tenor comparable to the applicable Interest Period, the Term SOFR Reference Rate at approximately 5:00 a.m., Chicago time, two U.S. Government Securities Business Days prior to the commencement of such tenor comparable to the applicable Interest Period, as such rate is published by the CME Term SOFR Administrator.
“Term SOFR Reference Rate” means, for any day and time (such day, the “Term SOFR Determination Day”), with respect to any Term Benchmark Borrowing denominated in dollars and for any tenor comparable to the applicable Interest Period, the rate per annum determined by the Administrative Agent as the forward-looking term rate based on SOFR. If by 5:00 pm (New York City time) on such Term SOFR Determination Day, the “Term SOFR Reference Rate” for the applicable tenor has not been published by the CME Term SOFR Administrator and a Benchmark Replacement Date with respect to the Term SOFR Rate has not occurred, then the Term SOFR Reference Rate for such Term SOFR Determination Day will be the Term SOFR Reference Rate as published in respect of the first preceding U.S. Government Securities Business Day for which such Term SOFR Reference Rate was published by the CME Term SOFR Administrator, so long as such first preceding Business Day is not more than five (5) Business Days prior to such Term SOFR Determination Day.
Termination Date” means the earlier of (i) the Maturity Date of the Loans and (ii) the date of termination of the Revolving Credit Commitments.
Total Net Funded Debt” means, as of any date of determination, for the Borrower and its Restricted Subsidiaries on a consolidated basis, (i) the sum of (a) the outstanding principal amount of all obligations, whether current or long-term, for borrowed money (including Secured Obligations hereunder) and all obligations evidenced by bonds, debentures, notes, loan agreements or other similar instruments, (b) all purchase money Debt, (c) all direct obligations arising under letters of credit (including standby and commercial), bankers’ acceptances, and bank guaranties, in each case, but only to the extent of any unreimbursed drawings thereunder, (d) all obligations in respect of the deferred purchase price of property or services (other than trade accounts payable in the ordinary course of business), (e) Debt in respect of Capital Lease Obligations, (f) without duplication, all guarantees with respect to outstanding Debt of the types specified in clauses (a) through (e) above of Persons other than the Borrower or any Restricted Subsidiary, and (g) all Debt of the types referred to in clauses (a) through (f) above of any partnership or other entity where owners of Equity Interests thereof have liability for the obligations of such entity in which the Borrower or a Restricted Subsidiary is a general partner or owner of such Equity Interests, unless (1) such Debt is expressly made non-recourse to the Borrower or such Restricted Subsidiary, or (2) such Debt is owed by such entity to the owners of the Equity Interests thereof, minus (ii) the amount of cash and short-term investments of Borrower and its Restricted Subsidiaries at the end of the relevant fiscal quarter with respect to which the Net Funded Leverage Ratio is being calculated, not to exceed $75,000,000 in the aggregate. For avoidance of doubt, Total Net Funded Debt does not include Wexford ULC Obligations.
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Transactions” means, with respect to (a) the Borrower, the execution, delivery and performance by the Borrower of this Agreement and each other Loan Document to which it is a party, the borrowing of Loans (including the continuation, renewal and extension of Loans initially advanced under the Existing Agreement), the use of the proceeds thereof and the issuance of Letters of Credit hereunder (including the continuation, renewal and extension of Existing Letters of Credit), the grant of and assignment of Liens by the Borrower on Mortgaged Properties and other Properties pursuant to the Security Instruments, (b) each Guarantor, the execution, delivery and performance by such Guarantor of each Loan Document to which it is a party, the guaranteeing of the Secured Obligations under the Guaranty and Collateral Agreement by such Guarantor and such Guarantor’s grant of the security interests and provision of collateral under the Security Instruments, and the grant of and assignment of Liens by such Guarantor on Mortgaged Properties and other Properties pursuant to the Security Instruments and (c) each Credit Party, the payment of fees and expenses in connection with all of the foregoing.
Treasury Regulations” means the Treasury regulations promulgated under the Code, as amended from time to time.
Type” means, when used in reference to any Loan or Borrowing, refers to whether the rate of interest on such Loan, or on the Loans comprising such Borrowing, is determined by reference to the Alternate Base Rate, the Adjusted Term SOFR Rate or the Adjusted LIBO RateDaily Simple SOFR.
U.S. Person” means any Person that is a “United States person” as defined in Section 7701(a)(30) of the Code.
“U.S. Special Resolution Regimes” has the meaning assigned to it in Section 12.25.
U.S. Tax Compliance Certificate” has the meaning assigned to such term in Section 5.03(e)(ii)(B)(3).
UK Financial Institution” means any BRRD Undertaking (as such term is defined under the PRA Rulebook (as amended from time to time) promulgated by the United Kingdom Prudential Regulation Authority) or any person falling within IFPRU 11.6 of the FCA Handbook (as amended from time to time) promulgated by the United Kingdom Financial Conduct Authority, which includes certain credit institutions and investment firms, and certain affiliates of such credit institutions or investment firms.
UK Resolution Authority” means the Bank of England or any other public administrative authority having responsibility for the resolution of any UK Financial Institution.
Unadjusted Benchmark Replacement” means the applicable Benchmark Replacement excluding the related Benchmark Replacement Adjustment.
Unrestricted Subsidiary” means any Subsidiary of the Borrower designated by the Borrower as an Unrestricted Subsidiary after the date hereof in accordance with, and subject to the satisfaction of the conditions set forth in, Section 1.06.
“U.S. Government Securities Business Day” means any day except for (a) a Saturday, (b) a Sunday or (c) a day on which the Securities Industry and Financial Markets Association recommends that the fixed income departments of its members be closed for the entire day for purposes of trading in United States government securities.
Weighted Average Life to Maturity” shall mean, when applied to any Debt at any date, the number of years obtained by dividing: (a) the sum of the products obtained by multiplying
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(i) the amount of each then remaining installment, sinking fund, serial maturity or other required payments of principal, including payment at final maturity, in respect thereof, by (ii) the number of years (calculated to the nearest one-twelfth) that will elapse between such date and the making of such payment; by (b) the then outstanding principal amount of such Debt.
Wexford ULC Obligations” means any obligations which Grizzly Holdings, Inc. (a Restricted Subsidiary Controlled by Borrower) may owe to Grizzly Oil Sands Inc. (an entity Controlled by Wexford Capital LP) arising by virtue of the fact that both Grizzly Holdings, Inc. and Grizzly Oil Sands Inc. are owners of Equity Interests in Grizzly Oil Sands.
Wholly-Owned Subsidiary” means any Restricted Subsidiary of which all of the outstanding Equity Interests (other than any directors’ qualifying shares mandated by applicable law), on a fully-diluted basis, are owned by the Borrower or one or more of the Wholly-Owned Subsidiaries of the Borrower or are owned by the Borrower and one or more of the Wholly-Owned Subsidiaries of the Borrower.
Withholding Agent” means any Credit Party and the Administrative Agent.
Working Capital” means, as of any date of determination, the difference of (a) consolidated current assets of the Borrower and its Consolidated Restricted Subsidiaries (excluding (i) all non-cash assets under FASB ASC Topic 815 and (ii) cur