Noel Gonzalez

Noel Gonzalez asked about the significant increase in drilled lateral lengths for 2026 (16,900 feet from 13,500 feet in 2025), seeking insight into the drivers, implications for DNC efficiencies and costs, and future lateral length development. He also inquired about the year-end proved reserves and PV-10, specifically what factors are driving the PV-10 increase despite flat production.

Answer

EVP and COO Matthew Rucker explained that the increase in lateral lengths is driven by optimizing development in discretionary acreage programs (wet gas area) to achieve 15,000-18,000 foot laterals for DNC efficiency. He noted that last year's shorter laterals were due to land position. Matthew Rucker also clarified that the PV-10 increase, even with consistent pricing, is due to converting proved undeveloped (PUD) reserves to proved developed producing (PDP), which adds value by removing costs and increasing PDP volume.

Noel Gonzalez questioned the significant increase in Gulfport Energy's drilled lateral lengths for 2026 (16,900 feet from 13,500 feet), asking about the drivers, DNC efficiencies, and future lateral length development. He also inquired about the year-end proved reserves and PV-10 increase from 2024 to 2025, seeking details on pricing sensitivity and contributing factors.

Answer

Matthew Rucker, Executive Vice President and Chief Operating Officer, stated the increase in lateral lengths is driven by optimizing development in discretionary acreage programs, targeting 15,000-18,000 feet for DNC efficiency gains, noting last year's shorter laterals were due to land position constraints. He explained the PV-10 increase is primarily due to converting PUDs to PDPs, which adds value by removing development costs from the reserve base, even at a consistent price deck, and confirmed that PDP volumes increase as more reserves are converted than produced.