S&P Upgrades Gulfport Energy to 'BB-' on Strong Financial Metrics and Capital Discipline

S&P Global Ratings has upgraded Gulfport Energy Corp.'s issuer credit rating to 'BB-' from 'B+', maintaining a stable outlook. The ratings agency cited the natural gas producer's track record of strong operational and financial performance, which it expects to continue over the next two years.

Key Financial Drivers

The upgrade reflects S&P's confidence in Gulfport's ability to maintain a strong balance sheet. The agency projects the company will sustain key credit metrics over the next 12 months, even while executing shareholder return programs.

Key projections and metrics highlighted by S&P include:

• Funds from operations (FFO) to debt of approximately 100%
• Debt to EBITDA of about 1x
• Annual EBITDA of $950 million to $1 billion over the next 24 months, based on an assumed Henry Hub natural gas price of $3.50 per million Btu.

S&P also noted Gulfport's strong reserve replacement, with an all-in replacement ratio of 185% in 2025 and a three-year average of 118%. The agency's analysis assumes Gulfport will continue its share repurchase program at a rate of roughly $300 million per year.

Operational Discipline Amid Weak Prices

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Gulfport's strategy demonstrates a clear prioritization of shareholder returns over production growth in the current weak natural gas price environment. The company is reducing its 2026 capital expenditures to $420 million, down from $520 million in 2025, primarily due to lower spending on land acquisition.

Operationally, Gulfport will transition from a two-rig program to a one-rig operation in the Utica shale for the remainder of 2026. Despite this reduction, production is expected to remain stable at 1 billion to 1.1 billion cubic feet equivalent per day.

Rating Outlook and Potential Risks

The stable outlook indicates S&P's belief that Gulfport will adhere to its financial policies. However, the agency stated it could lower the rating if FFO to debt falls below 60% or if debt to EBITDA rises above 2x for a sustained period.

Such a scenario could be triggered by larger-than-expected debt-financed share buybacks or a significant decline in natural gas prices without a corresponding adjustment in capital spending or shareholder returns, according to S&P.