Gulfport Energy Corporation (NASDAQ: GPOR) (“Gulfport” or the
“Company”) today reported financial and operational results for the
three-months ended March 31, 2020 and provided an update on
its 2020 activities. Key highlights are as follows:
- Reduced total long-term debt by approximately $79.6 million as
of March 31, 2020 when compared to December 31, 2019 primarily
through discounted bond repurchases
- Improved drilling efficiencies as measured by spud to total
depth drilling days on a normalized basis in the Utica Shale and
SCOOP by 11% and 32%, respectively, versus full year 2019
levels
- Reported net loss of $517.5 million, or $3.24 per diluted
share
- Reported adjusted net income (non-GAAP) of $16.6 million, or
$0.10 per diluted share
- Generated adjusted EBITDA (non-GAAP) of $128.3 million
- Reported cash provided by operating activities of $130.8
million
- Generated operating cash flow (non-GAAP), excluding working
capital changes, of $86.7 million
- Improved 2020 and 2021 gas hedge portfolio with 495 BBtu per
day of remaining 2020 natural gas production hedged at an average
swap price of $2.88 per MMBtu and 250 BBtu per day of 2021 natural
gas production hedged with costless collars at an average floor
price of $2.46 per MMBtu and an average ceiling price of $2.81 per
MMBtu
- Completed semi-annual borrowing base redetermination and
revolving credit facility redetermined at $700 million, providing
adequate liquidity to fund our 2020 capital plan at current strip
pricing
See the supplemental tables at the end of this
press release for a reconciliation of non-GAAP measures including
adjusted net income, EBITDA, adjusted EBITDA, and operating cash
flow.
Chief Executive Officer and President, David M.
Wood, commented, "During these unprecedented times, our focus is on
the health and safety of our employees while continuing to execute
on our 2020 capital budget we laid out in February. We remain
committed to exercising capital discipline, maximizing cash flow
generation, reducing costs and ensuring strong liquidity through
the remainder of 2020."
Mr. Wood continued, "Our continued focus on
increasing efficiencies and reducing costs led to solid progress
during the first quarter of 2020. As planned, Gulfport's 2020
capital program is heavily weighted to the first half of 2020 and
as a result, we are well positioned to generate positive free cash
flow during the second half of the year."
Continued Debt ReductionAs of
May 1, 2020, the Company had repurchased $73.3 million
aggregate principal amount of unsecured senior notes for $22.8
million in cash during 2020. Since initiating the debt repurchase
program in mid-2019, Gulfport had repurchased $263.4 million
aggregate principal amount of unsecured senior notes for $161.6
million cash representing a total discount capture of $101.8
million and an annual cash interest reduction of approximately $11
million.
Balance Sheet and
LiquidityGulfport completed its spring borrowing base
redetermination effective May 1, 2020 and the borrowing base was
redetermined at $700 million. Pro forma for the revised
borrowing base,the Company’s liquidity at May 1, 2020 totaled
approximately $269.0 million, comprised of the $700 million
borrowing base plus approximately $3.8 million in cash on hand less
$326.8 million outstanding letters of credit and $108.0 million of
revolver draw as of May 1, 2020.
The revised $700 million borrowing base provides
adequate liquidity to finance the Company’s projected 2020 capital
plan.
Production and Realized
PricesGulfport’s net daily production for the first
quarter of 2020 averaged approximately 1,054 MMcfe per day. For the
first quarter of 2020, Gulfport’s net daily production mix was
comprised of approximately 90% natural gas, 7% natural gas liquids
("NGL") and 3% oil.
GULFPORT ENERGY CORPORATION |
PRODUCTION SCHEDULE |
(Unaudited) |
|
Three months ended |
|
March 31, |
Production
Volumes: |
2020 |
|
2019 |
|
|
|
|
Natural gas (MMcf) |
86,059 |
|
|
102,079 |
|
Oil (MBbls) |
532 |
|
|
612 |
|
NGL (MGal) |
46,518 |
|
|
55,830 |
|
Gas equivalent (MMcfe) |
95,896 |
|
|
113,726 |
|
Gas equivalent (Mcfe per
day) |
1,053,799 |
|
|
1,263,617 |
|
|
|
|
|
Average Realized
Prices |
|
|
|
(after deducts for
transportation costs and before the impact of
derivatives): |
|
|
|
|
|
|
|
Natural gas (per Mcf) |
$ |
1.26 |
|
|
$ |
2.70 |
|
Oil (per Bbl) |
$ |
43.53 |
|
|
$ |
53.10 |
|
NGL (per Gal) |
$ |
0.36 |
|
|
$ |
0.58 |
|
Gas equivalent (per Mcfe) |
$ |
1.55 |
|
|
$ |
3.00 |
|
|
|
|
|
Average Realized
Prices: |
|
|
|
(after
deducts for transportation costs and including cash-settlement of
derivatives): |
|
|
|
|
Natural gas (per Mcf) |
$ |
1.97 |
|
|
$ |
2.45 |
|
Oil (per Bbl) |
$ |
61.39 |
|
|
$ |
53.13 |
|
NGL (per Gal) |
$ |
0.37 |
|
|
$ |
0.59 |
|
Gas equivalent (per Mcfe) |
$ |
2.29 |
|
|
$ |
2.78 |
|
The table below summarizes Gulfport’s first
quarter of 2020 production by asset area:
GULFPORT ENERGY CORPORATION |
PRODUCTION BY AREA |
(Unaudited) |
|
Three months ended |
|
March 31, |
|
2020 |
2019 |
Utica
Shale |
|
|
Natural gas (MMcf) |
71,505 |
|
85,700 |
|
Oil (MBbls) |
54 |
|
66 |
|
NGL (MGal) |
12,221 |
|
23,336 |
|
Gas equivalent (MMcfe) |
73,575 |
|
89,428 |
|
|
|
|
SCOOP |
|
|
Natural gas (MMcf) |
14,550 |
|
16,366 |
|
Oil (MBbls) |
471 |
|
398 |
|
NGL (MGal) |
34,297 |
|
32,480 |
|
Gas equivalent (MMcfe) |
22,274 |
|
23,394 |
|
|
|
|
Other |
|
|
Natural gas (MMcf) |
4 |
|
13 |
|
Oil (MBbls) |
7 |
|
148 |
|
NGL (MGal) |
— |
|
15 |
|
Gas equivalent (MMcfe) |
47 |
|
904 |
|
2020 Capital ExpendituresFor
the three-month period ended March 31, 2020, Gulfport’s
incurred total capital expenditures were $135.3 million. Gulfport’s
incurred total capital expenditures includes approximately $127.3
million of operated drilling and completion (“D&C”) capital
expenditures, $3.4 million of non-operated D&C expenditures and
$4.6 million of land capital expenditures. The Company's 2020
capital program is heavily weighted in first half of 2020 and the
Company expects to generate positive cash flow during the second
half of 2020.
Operational UpdateFor the
three-month period ended March 31, 2020, key operational
updates include:
- Spud 7 gross and net operated wells in the Utica Shale and 5
gross (4.3 net) operated wells in the SCOOP and had 3 gross wells
in various stages of drilling at the end of the first quarter of
2020
- Completed 15 gross and net operated wells in the Utica Shale
and 4 gross (3.8 net) operated wells in the SCOOP during the first
quarter of 2020 and had 3 gross wells in various stages of
completion at the end of the first quarter of 2020
- Turned-to-sales 4 gross (3.8 net) operated wells in the SCOOP
during the first quarter of 2020 and 3 gross and net operated wells
in the Utica Shale after March 19, 2020
The table below summarizes Gulfport's activity
for the three-month period ended March 31, 2020:
GULFPORT ENERGY CORPORATION |
ACTIVITY SUMMARY |
(Unaudited) |
|
|
|
|
|
Three months ended |
|
|
|
March 31, |
|
Guidance |
|
2020 |
|
2020 |
Net Wells
Spud |
|
|
|
Utica - Operated |
7.0 |
|
15 |
SCOOP - Operated |
4.3 |
|
8 |
Total |
11.3 |
|
|
|
|
|
|
Net Wells
Turned-to-Sales |
|
|
|
Utica - Operated |
3.0 |
|
18 |
SCOOP -
Operated |
3.8 |
|
4 |
Total |
6.8 |
|
|
Utica ShaleIn the Utica Shale,
during the first quarter of 2020, Gulfport spud 7 gross and net
operated wells. The wells drilled during this period had an average
lateral length of approximately 10,200 feet. Normalizing to an
8,000 foot lateral length, Gulfport's average drilling days from
spud to rig release totaled approximately 17.7 days, an improvement
of 11% from the 2019 average and the best average quarter to date
the Company has experienced in the play. In addition, Gulfport
turned-to-sales 3 gross (3.0 net) operated wells with an average
stimulated lateral length of approximately 15,100 feet.
At present, Gulfport has one operated drilling
rig running in the play and expects to continue with this level of
activity through October 2020.
SCOOPIn the SCOOP, during the
first quarter of 2020, Gulfport spud five gross (4.3 net) operated
wells. The wells drilled during this period had an average lateral
length of approximately 9,500 feet. Normalizing to a 7,500 foot
lateral length, Gulfport's average drilling days from spud to rig
release totaled approximately 37.4 days, an improvement of 32% from
the 2019 average and similar to the Utica Shale, the best average
quarter to date the Company has experienced since entering the
play. In addition, Gulfport turned-to-sales four gross (3.8
net) operated wells with an average stimulated lateral length of
approximately 6,500 feet.
At present, Gulfport has one operated drilling
rig running in the play and expects to continue with this level of
activity for the remainder of 2020.
2020 Capital Budget and Production
GuidanceBased on continued efficiencies, service cost
deflation and actual results to date, Gulfport currently forecasts
2020 total capital expenditures to be at or below the low end of
the previously provided range of $285 million to $310 million.
Because of the sharp decline in oil prices since
early March 2020, as well as the current outlook for low oil
prices throughout the second quarter of 2020, Gulfport plans to
shut in a minimal amount production over the next few months,
including a large number of vertical wells in the SCOOP. The
Company expects these shut ins to impact its production by less
than 20 MMcfe per day. Gulfport also anticipates some of its
non-operated production may be negatively impacted by voluntary
shut-ins due to low prices. In addition, the COVID-19
pandemic creates risks of delays in new drilling and completion
activities that could negatively impact Gulfport, its
non-operated partners or its service providers. Finally,
Gulfport is actively exploring opportunities to potentially defer
near-term production to later periods in 2020 or early 2021 when
gas prices are materially higher in an effort to maximize returns
and cash flow. Considering all of these factors, Gulfport's
previously provided production guidance for full year 2020 should
no longer be relied upon.
Gulfport reaffirms its previously provided 2020
forecasted realizations and projected operating costs guidance.
DerivativesGulfport regularly
hedges a portion of its expected production to lock in prices and
returns that provide certainty of cash flow to execute on its
capital plans. The table below details the Company's hedging
positions as of May 7, 2020:
GULFPORT ENERGY CORPORATION |
COMMODITY DERIVATIVES - HEDGE POSITION |
(Unaudited) |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2Q2020 |
|
3Q2020 |
|
4Q2020 |
|
|
Natural
Gas: |
|
|
|
|
|
|
|
Swap Contracts
(NYMEX) |
|
|
|
|
|
|
|
Volume (BBtupd) |
774 |
|
|
345 |
|
|
370 |
|
|
|
Price ($ per MMBtu) |
$ |
2.91 |
|
|
$ |
2.91 |
|
|
$ |
2.80 |
|
|
|
|
|
|
|
|
|
|
|
Basis Swap Contracts
(OGT) |
|
|
|
|
|
|
|
Volume (BBtupd) |
10 |
|
|
10 |
|
|
10 |
|
|
|
Differential ($ per
MMBtu) |
$ |
(0.54 |
) |
|
$ |
(0.54 |
) |
|
$ |
(0.54 |
) |
|
|
|
|
|
|
|
|
|
|
Basis Swap Contracts
(Transco Zone 4) |
|
|
|
|
|
|
|
Volume (BBtupd) |
60 |
|
|
60 |
|
|
60 |
|
|
|
Differential ($ per
MMBtu) |
$ |
(0.05 |
) |
|
$ |
(0.05 |
) |
|
$ |
(0.05 |
) |
|
|
|
|
|
|
|
|
|
|
Oil: |
|
|
|
|
|
|
|
Swap Contracts
(WTI) |
|
|
|
|
|
|
|
Volume (Bblpd) |
— |
|
|
2,000 |
|
|
2,000 |
|
|
|
Price ($ per Bbl) |
$ |
— |
|
|
$ |
35.60 |
|
|
$ |
35.60 |
|
|
|
|
|
|
|
|
|
|
|
NGL: |
|
|
|
|
|
|
|
C3 Propane Swap
Contracts |
|
|
|
|
|
|
|
Volume (Bblpd) |
500 |
|
|
500 |
|
|
500 |
|
|
|
Price ($ per Gal) |
$ |
0.52 |
|
|
$ |
0.52 |
|
|
$ |
0.52 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2020(1) |
|
2021 |
|
2022 |
|
2023 |
Natural
Gas: |
|
|
|
|
|
|
|
Swap Contracts
(NYMEX) |
|
|
|
|
|
|
|
Volume (BBtupd) |
495 |
|
|
— |
|
|
— |
|
|
— |
|
Price ($ per MMBtu) |
$ |
2.88 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Collars
(NYMEX) |
|
|
|
|
|
|
|
Volume (BBtupd) |
— |
|
|
250 |
|
|
— |
|
|
— |
|
Weighted Average Floor
Purchase Price ($ per MMBtu) |
$ |
— |
|
|
$ |
2.46 |
|
|
$ |
— |
|
|
$ |
— |
|
Weighted Average Ceiling Sold
Price ($ per MMBtu) |
$ |
— |
|
|
$ |
2.81 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Call Option Contracts
(NYMEX) |
|
|
|
|
|
|
|
Volume (BBtupd) |
— |
|
|
— |
|
|
628 |
|
|
628 |
|
Price ($ per MMBtu) |
$ |
— |
|
|
$ |
— |
|
|
$ |
2.90 |
|
|
$ |
2.90 |
|
|
|
|
|
|
|
|
|
Basis Swap Contracts
(OGT) |
|
|
|
|
|
|
|
Volume (BBtupd) |
10 |
|
|
— |
|
|
— |
|
|
— |
|
Differential ($ per
MMBtu) |
$ |
(0.54 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Basis Swap Contracts
(Transco Zone 4) |
|
|
|
|
|
|
|
Volume (BBtupd) |
60 |
|
|
— |
|
|
— |
|
|
— |
|
Differential ($ per
MMBtu) |
$ |
(0.05 |
) |
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
Oil: |
|
|
|
|
|
|
|
Swap Contracts
(WTI) |
|
|
|
|
|
|
|
Volume (Bblpd) |
1,338 |
|
|
— |
|
|
— |
|
|
— |
|
Price ($ per Bbl) |
$ |
35.60 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
NGL: |
|
|
|
|
|
|
|
C3 Propane Swap
Contracts |
|
|
|
|
|
|
|
Volume (Bblpd) |
500 |
|
|
— |
|
|
— |
|
|
— |
|
Price ($ per Gal) |
$ |
0.52 |
|
|
$ |
— |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
|
|
(1) April 1 - December
31, 2020 |
|
|
|
|
|
|
|
PresentationAn updated
presentation has been posted to the Company’s website. The
presentation can be found at www.gulfportenergy.com under the
“Company Information” section on the “Investor Relations” page.
Information on the Company’s website does not constitute a portion
of this press release.
Conference CallGulfport will
host its first quarter of 2020 earnings conference call
on Friday, May 8, 2020 at 9:00 a.m. Central Time.
Interested parties may listen to the call via
Gulfport’s website at www.gulfportenergy.com or by calling
toll-free at 866-373-3408 or 412-902-1039 for international
callers. A replay of the call will be available for two weeks
at 877-660-6853 or 201-612-7415 for international callers.
The replay passcode is 13695468. The webcast will also be
available for two weeks on the Company’s website and can be
accessed on the Company’s “Investor Relations” page.
About GulfportGulfport Energy
is an independent natural gas and oil company focused on the
exploration and development of natural gas and oil properties in
North America and is one of the largest producers of natural gas in
the contiguous United States. Headquartered in Oklahoma City,
Gulfport holds significant acreage positions in the Utica Shale of
Eastern Ohio and the SCOOP Woodford and SCOOP Springer plays in
Oklahoma. In addition, Gulfport holds non-core assets that include
an approximately 22% equity interest in Mammoth Energy Services,
Inc. (NASDAQ: TUSK) and has a position in the Alberta Oil Sands in
Canada through its 25% interest in Grizzly Oil Sands ULC. For more
information, please visit www.gulfportenergy.com.
Forward Looking StatementsThis
press release includes “forward-looking statements” for purposes of
the safe harbor provisions of the Private Securities Litigation
Reform Act of 1995, Section 27A of the Securities Act of 1933, as
amended, and Section 21E of the Securities Exchange Act of 1934.
All statements, other than statements of historical facts, included
in this press release that address activities, events or
developments that Gulfport expects or anticipates will or may occur
in the future, including such things as the expected impact of the
COVID-19 pandemic on our business, our industry and the global
economy, production and financial guidance, future capital
expenditures (including the amount and nature thereof), business
strategy and measures to implement strategy, repurchases of our
outstanding debt, the timing and completion of asset sales,
competitive strength, goals, expansion and growth of Gulfport’s
business and operations, plans, market conditions, references to
future success, reference to intentions as to future matters and
other such matters are forward-looking statements. These statements
are based on certain assumptions and analyses made by Gulfport in
light of its experience and its perception of historical trends,
current conditions and expected future developments as well as
other factors it believes are appropriate in the circumstances.
However, whether actual results and developments will conform with
Gulfport’s expectations and predictions is subject to a number of
risks and uncertainties, general economic, market, credit or
business conditions that might affect the timing and amount of the
repurchase program; the opportunities (or lack thereof) that may be
presented to and pursued by Gulfport; Gulfport’s ability to
identify, complete and integrate acquisitions of properties and
businesses; Gulfport’s ability to achieve the anticipated benefits
of its strategic initiatives; competitive actions by other oil and
gas companies; changes in laws or regulations; and other factors,
many of which are beyond the control of Gulfport. Information
concerning these and other factors can be found in the Company’s
filings with the Securities and Exchange Commission ("SEC"),
including its Forms 10-K, 10-Q and 8-K. Consequently, all of the
forward-looking statements made in this press release are qualified
by these cautionary statements and there can be no assurances that
the actual results or developments anticipated by Gulfport will be
realized, or even if realized, that they will have the expected
consequences to or effects on Gulfport, its business or operations.
Gulfport has no intention, and disclaims any obligation, to update
or revise any forward-looking statements, whether as a result of
new information, future results or otherwise.
Investors should note that Gulfport announces
financial information in SEC filings, press releases and public
conference calls. Gulfport may use the Investors section of
its 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 Gulfport’s website is not
part of this filing.
Investor Contact:Jessica Antle
– Director, Investor
Relationsjantle@gulfportenergy.com405-252-4550
Media ContactReevemarkPaul
Caminiti / Hugh Burns / Nicholas Leasure212-433-4600
GULFPORT ENERGY
CORPORATIONCONSOLIDATED BALANCE
SHEETS
|
March 31, 2020 |
|
December 31, 2019 |
|
(Unaudited) |
|
|
|
(In thousands, except share data) |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and cash equivalents |
$ |
1,633 |
|
|
$ |
6,060 |
|
Accounts receivable—oil and natural gas sales |
74,099 |
|
|
121,210 |
|
Accounts receivable—joint interest and other |
42,547 |
|
|
47,975 |
|
Prepaid expenses and other current assets |
11,848 |
|
|
4,431 |
|
Short-term derivative instruments |
171,755 |
|
|
126,201 |
|
Total current assets |
301,882 |
|
|
305,877 |
|
Property and equipment: |
|
|
|
Oil and natural gas properties, full-cost accounting, $1,608,640
and $1,686,666 excluded from amortization in 2020 and 2019,
respectively |
10,667,532 |
|
|
10,595,735 |
|
Other property and equipment |
96,882 |
|
|
96,719 |
|
Accumulated depletion, depreciation, amortization and
impairment |
(7,859,873 |
) |
|
(7,228,660 |
) |
Property and equipment, net |
2,904,541 |
|
|
3,463,794 |
|
Other assets: |
|
|
|
Equity investments |
6,225 |
|
|
32,044 |
|
Long-term derivative instruments |
— |
|
|
563 |
|
Deferred tax asset |
— |
|
|
7,563 |
|
Operating lease assets |
10,186 |
|
|
14,168 |
|
Operating lease assets—related parties |
— |
|
|
43,270 |
|
Other assets |
41,453 |
|
|
15,540 |
|
Total other assets |
57,864 |
|
|
113,148 |
|
Total assets |
$ |
3,264,287 |
|
|
$ |
3,882,819 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Current liabilities: |
|
|
|
Accounts payable and accrued liabilities |
$ |
437,453 |
|
|
$ |
415,218 |
|
Short-term derivative instruments |
67 |
|
|
303 |
|
Current portion of operating lease liabilities |
9,873 |
|
|
13,826 |
|
Current portion of operating lease liabilities—related parties |
— |
|
|
21,220 |
|
Current maturities of long-term debt |
688 |
|
|
631 |
|
Total current liabilities |
448,081 |
|
|
451,198 |
|
Long-term derivative
instruments |
70,829 |
|
|
53,135 |
|
Asset retirement obligation |
59,444 |
|
|
60,355 |
|
Uncertain tax position
liability |
3,209 |
|
|
3,127 |
|
Non-current operating lease
liabilities |
313 |
|
|
342 |
|
Non-current operating lease
liabilities—related parties |
— |
|
|
22,050 |
|
Long-term debt, net of current
maturities |
1,898,362 |
|
|
1,978,020 |
|
Total liabilities |
2,480,238 |
|
|
2,568,227 |
|
Commitments and
contingencies |
|
|
|
Preferred stock, $0.01 par value;
5,000,000 shares authorized (30,000 authorized as redeemable 12%
cumulative preferred stock, Series A), and none issued and
outstanding |
— |
|
|
— |
|
Stockholders’ equity: |
|
|
|
Common stock - $.01 par value, 200,000,000 shares authorized,
159,841,930 issued and outstanding at March 31, 2020 and
159,710,955 at December 31, 2019 |
1,598 |
|
|
1,597 |
|
Paid-in capital |
4,209,578 |
|
|
4,207,554 |
|
Accumulated other comprehensive loss |
(61,863 |
) |
|
(46,833 |
) |
Accumulated deficit |
(3,365,264 |
) |
|
(2,847,726 |
) |
Total stockholders’ equity |
784,049 |
|
|
1,314,592 |
|
Total liabilities and stockholders’ equity |
$ |
3,264,287 |
|
|
$ |
3,882,819 |
|
GULFPORT ENERGY
CORPORATIONCONSOLIDATED STATEMENTS OF
OPERATIONS(Unaudited)
|
Three months ended March 31, |
|
2020 |
|
2019 |
|
|
|
|
|
(In thousands, except share data) |
Revenues: |
|
|
|
Natural gas sales |
$ |
108,547 |
|
|
$ |
276,016 |
|
Oil and condensate sales |
23,151 |
|
|
32,482 |
|
Natural gas liquid sales |
16,913 |
|
|
32,125 |
|
Net gain (loss) on natural gas, oil and NGL derivatives |
98,266 |
|
|
(20,045 |
) |
|
246,877 |
|
|
320,578 |
|
Costs and
expenses: |
|
|
|
Lease operating expenses |
15,986 |
|
|
19,807 |
|
Production taxes |
4,799 |
|
|
7,921 |
|
Midstream gathering and processing expenses |
57,896 |
|
|
70,282 |
|
Depreciation, depletion and amortization |
78,028 |
|
|
118,433 |
|
Impairment of oil and natural gas properties |
553,345 |
|
|
— |
|
General and administrative expenses |
16,169 |
|
|
10,057 |
|
Accretion expense |
741 |
|
|
1,067 |
|
|
726,964 |
|
|
227,567 |
|
(LOSS) INCOME FROM
OPERATIONS |
(480,087 |
) |
|
93,011 |
|
OTHER EXPENSE (INCOME): |
|
|
|
Interest expense |
32,990 |
|
|
35,621 |
|
Interest income |
(152 |
) |
|
(152 |
) |
Gain on debt extinguishment |
(15,322 |
) |
|
— |
|
Loss (income) from equity method investments, net |
10,789 |
|
|
(4,273 |
) |
Other expense (income) |
1,856 |
|
|
(427 |
) |
|
30,161 |
|
|
30,769 |
|
(LOSS) INCOME BEFORE INCOME
TAXES |
(510,248 |
) |
|
62,242 |
|
INCOME TAX EXPENSE |
7,290 |
|
|
— |
|
NET (LOSS)
INCOME |
$ |
(517,538 |
) |
|
$ |
62,242 |
|
NET (LOSS) INCOME PER
COMMON SHARE: |
|
|
|
Basic |
$ |
(3.24 |
) |
|
$ |
0.38 |
|
Diluted |
$ |
(3.24 |
) |
|
$ |
0.38 |
|
Weighted average common shares
outstanding—Basic |
159,760,222 |
|
|
162,823,997 |
|
Weighted average common shares
outstanding—Diluted |
159,760,222 |
|
|
163,099,409 |
|
GULFPORT ENERGY
CORPORATIONCONSOLIDATED STATEMENTS OF CASH
FLOWS(Unaudited)
|
Three months ended March 31, |
|
2020 |
|
2019 |
|
|
|
|
|
(In thousands) |
Cash flows from operating
activities: |
|
|
|
Net (loss) income |
$ |
(517,538 |
) |
|
$ |
62,242 |
|
Adjustments to reconcile net (loss) income to net cash provided by
operating activities: |
|
|
|
Depletion, depreciation and amortization |
78,028 |
|
|
118,433 |
|
Impairment of oil and natural gas properties |
553,345 |
|
|
— |
|
Loss (income) from equity investments |
10,789 |
|
|
(4,132 |
) |
Gain on debt extinguishment |
(15,322 |
) |
|
— |
|
Net (gain) loss on derivative instruments |
(98,266 |
) |
|
20,045 |
|
Cash receipts (payments) on settled derivative instruments |
70,733 |
|
|
(24,836 |
) |
Deferred income tax expense |
7,290 |
|
|
— |
|
Other, net |
3,223 |
|
|
5,508 |
|
Changes in operating assets and liabilities: |
|
|
|
Decrease in accounts receivable—oil and natural gas sales |
47,111 |
|
|
65,204 |
|
Decrease (increase) in accounts receivable—joint interest and
other |
6,001 |
|
|
(2,083 |
) |
(Decrease) increase in accounts payable and accrued
liabilities |
(7,637 |
) |
|
1,366 |
|
Other, net |
(6,919 |
) |
|
(1,982 |
) |
Net cash provided by operating
activities |
130,838 |
|
|
239,765 |
|
Cash flows from investing
activities: |
|
|
|
Additions to oil and natural gas properties |
(113,744 |
) |
|
(241,391 |
) |
Proceeds from sale of oil and natural gas properties |
44,383 |
|
|
52 |
|
Additions to other property and equipment |
(539 |
) |
|
(3,848 |
) |
Proceeds from sale of other property and equipment |
91 |
|
|
56 |
|
Contributions to equity method investments |
— |
|
|
(432 |
) |
Net cash used in investing
activities |
(69,809 |
) |
|
(245,563 |
) |
Cash flows from financing
activities: |
|
|
|
Principal payments on borrowings |
(180,106 |
) |
|
(150,151 |
) |
Borrowings on line of credit |
125,000 |
|
|
150,000 |
|
Repurchases of senior notes |
(10,204 |
) |
|
— |
|
Payments for repurchases of stock under approved stock repurchase
program |
— |
|
|
(28,212 |
) |
Other, net |
(146 |
) |
|
(140 |
) |
Net cash used in financing
activities |
(65,456 |
) |
|
(28,503 |
) |
Net decrease in cash, cash
equivalents and restricted cash |
(4,427 |
) |
|
(34,301 |
) |
Cash, cash equivalents and
restricted cash at beginning of period |
6,060 |
|
|
52,297 |
|
Cash, cash equivalents and
restricted cash at end of period |
$ |
1,633 |
|
|
$ |
17,996 |
|
Supplemental disclosure
of cash flow information: |
|
|
|
Interest payments |
$ |
14,034 |
|
|
$ |
15,266 |
|
Income tax receipts |
$ |
— |
|
|
$ |
(1,794 |
) |
Supplemental disclosure
of non-cash transactions: |
|
|
|
Capitalized stock-based compensation |
$ |
934 |
|
|
$ |
1,114 |
|
Asset retirement obligation capitalized |
$ |
381 |
|
|
$ |
1,952 |
|
Asset retirement obligation removed due to divestiture |
$ |
(2,033 |
) |
|
$ |
— |
|
Interest capitalized |
$ |
187 |
|
|
$ |
766 |
|
Fair value of contingent consideration asset on date of
divestiture |
$ |
23,090 |
|
|
$ |
— |
|
Foreign currency translation (loss) gain on equity method
investments |
$ |
(15,030 |
) |
|
$ |
3,801 |
|
Explanation and Reconciliation of
Non-GAAP Financial MeasuresEBITDA is a non-GAAP financial
measure equal to net (loss) income, the most directly comparable
GAAP financial measure, plus interest expense, income tax (benefit)
expense, accretion expense, depreciation, depletion and
amortization and impairment of oil and gas properties. Adjusted
EBITDA is a non-GAAP financial measure equal to EBITDA less
non-cash derivative loss (gain), rig terminations fees, gain on
debt extinguishment, non-recurring general and administrative
expenses and (income) loss from equity method investments. Cash
flow from operating activities before changes in operating assets
and liabilities is a non-GAAP financial measure equal to cash
provided by operating activity before changes in operating assets
and liabilities and inclusive of capitalized expenses incurred
during the given period. Free cash flow is a non-GAAP measure
defined as cash flow from operating activities before changes in
operating assets and liabilities (as defined above) less capital
expenditures incurred. Adjusted net income is a non-GAAP financial
measure equal to pre-tax net (loss) income less non-cash derivative
loss (gain), impairment of oil and gas properties, rig terminations
fees, gain on debt extinguishment, non-recurring general and
administrative expenses and (income) loss from equity method
investments. The Company has presented EBITDA, adjusted EBITDA,
adjusted net income, cash flow from operating activities before
changes in operating assets and liabilities and free cash flow
because it uses these measures as an integral part of its internal
reporting to evaluate its performance and the performance of its
senior management. These measures are considered important
indicators of the operational strength of the Company’s business
and eliminate the uneven effect of considerable amounts of non-cash
depletion, depreciation of tangible assets and amortization of
certain intangible assets. A limitation of these measures, however,
is that they do not reflect the periodic costs of certain
capitalized tangible and intangible assets used in generating
revenues in the Company’s business. Management evaluates the costs
of such tangible and intangible assets and the impact of related
impairments through other financial measures, such as capital
expenditures, investment spending and return on capital. Therefore,
the Company believes that these measures provide useful information
to its investors regarding its performance and overall results of
operations. EBITDA, adjusted EBITDA, adjusted net income, cash flow
from operating activities before changes in operating assets and
liabilities and free cash flow are not intended to be performance
measures that should be regarded as an alternative to, or more
meaningful than, either net income as an indicator of operating
performance or to cash flows from operating activities as a measure
of liquidity. In addition, EBITDA, adjusted EBITDA, adjusted net
income and cash flow from operating activities before changes in
operating assets and liabilities are not intended to represent
funds available for reinvestment or other discretionary uses, and
should not be considered in isolation or as a substitute for
measures of performance prepared in accordance with GAAP. The
EBITDA, adjusted EBITDA, adjusted net income, cash flow from
operating activities before changes in operating assets and
liabilities and free cash flow presented in this press release may
not be comparable to similarly titled measures presented by other
companies, and may not be identical to corresponding measures used
in the Company’s various agreements.
GULFPORT ENERGY CORPORATION |
RECONCILIATION OF EBITDA |
(Unaudited) |
|
|
|
|
|
Three months ended March 31, |
|
2020 |
|
2019 |
|
|
|
|
|
(In thousands) |
|
|
|
|
Net (loss) income |
$ |
(517,538 |
) |
|
$ |
62,242 |
|
Interest expense |
32,990 |
|
|
35,621 |
|
Income tax expense |
7,290 |
|
|
— |
|
Accretion expense |
741 |
|
|
1,067 |
|
Depreciation, depletion and
amortization |
78,028 |
|
|
118,433 |
|
Impairment of oil and gas
properties |
553,345 |
|
|
— |
|
EBITDA |
$ |
154,856 |
|
|
$ |
217,363 |
|
GULFPORT ENERGY CORPORATION |
RECONCILIATION OF ADJUSTED EBITDA |
(Unaudited) |
|
|
|
|
|
Three months ended March 31, |
|
2020 |
|
2019 |
|
|
|
|
|
(In thousands) |
|
|
|
|
EBITDA |
$ |
154,856 |
|
|
$ |
217,363 |
|
|
|
|
|
Adjustments: |
|
|
|
Non-cash derivative gain |
(28,914 |
) |
|
(4,791 |
) |
Non-cash derivative loss on
contingent payments |
1,381 |
|
|
— |
|
Rig termination fees |
1,649 |
|
|
— |
|
Gain on debt
extinguishment |
(15,322 |
) |
|
— |
|
Non-recurring general and
administrative expenses |
3,905 |
|
|
538 |
|
Loss (income) from equity
method investments |
10,789 |
|
|
(4,273 |
) |
|
|
|
|
|
|
|
|
Adjusted
EBITDA |
$ |
128,344 |
|
|
$ |
208,837 |
|
|
|
|
|
GULFPORT ENERGY CORPORATION |
RECONCILIATION OF CASH FLOW |
(Unaudited) |
|
|
|
|
|
Three months ended March 31, |
|
2020 |
|
2019 |
|
|
|
|
|
(In thousands) |
|
|
|
|
Cash provided by operating
activity |
$ |
130,838 |
|
|
$ |
239,765 |
|
Adjustments: |
|
|
|
Changes in operating assets
and liabilities |
(38,556 |
) |
|
(62,505 |
) |
Capitalized expenses
incurred(1) |
(5,618 |
) |
|
(8,461 |
) |
Operating cash flow |
$ |
86,664 |
|
|
$ |
168,799 |
|
Capital expenditures
incurred(2) |
(135,305 |
) |
|
(274,946 |
) |
Free cash
flow |
$ |
(48,641 |
) |
|
$ |
(106,147 |
) |
|
|
|
|
(1) Includes capitalized general and administrative
expense incurred and capitalized interest expenses incurred |
(2) Incurred
capital expenditures and cash capital expenditures may vary from
period to period due to the cash payment cycle |
GULFPORT ENERGY CORPORATION |
RECONCILIATION OF ADJUSTED NET INCOME |
(Unaudited) |
|
|
|
|
|
Three months ended March 31, |
|
2020 |
|
2019 |
|
|
|
|
|
(In thousands, except share data) |
|
|
|
|
(Loss) income before income
taxes |
$ |
(510,248 |
) |
|
$ |
62,242 |
|
Adjustments: |
|
|
|
Non-cash derivative gain |
(28,914 |
) |
|
(4,791 |
) |
Non-cash derivative loss on
contingent payments |
1,381 |
|
|
— |
|
Impairment of oil and gas
properties |
553,345 |
|
|
— |
|
Rig termination fees |
1,649 |
|
|
— |
|
Gain on debt
extinguishment |
(15,322 |
) |
|
— |
|
Non-recurring general and
administrative expenses |
3,905 |
|
|
538 |
|
Loss (income) from equity
method investments |
10,789 |
|
|
(4,273 |
) |
Pre-tax net income excluding
adjustments |
$ |
16,585 |
|
|
$ |
53,716 |
|
|
|
|
|
Adjusted net
income |
$ |
16,585 |
|
|
$ |
53,716 |
|
|
|
|
|
Adjusted net income
per common share: |
|
|
|
Basic |
$ |
0.10 |
|
|
$ |
0.33 |
|
Diluted |
$ |
0.10 |
|
|
$ |
0.33 |
|
|
|
|
|
Basic weighted average shares
outstanding |
159,760,222 |
|
|
162,823,997 |
|
Diluted weighted average
shares outstanding |
161,312,645 |
|
|
163,099,409 |
|
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