Gulfport Energy Corporation (NASDAQ: GPOR) (“Gulfport” or the
“Company”) today announced its 2019 capital budget, its 2019
operational outlook and that its board of directors has approved a
new stock repurchase program to acquire up to $400 million of its
outstanding common stock within the next 24 months. This
authorization follows closely behind the completion of the 2018
previously announced and expanded $200 million share repurchase
program, which concluded in the fourth quarter of 2018. Key
information concerning the 2019 budget and outlook includes the
following:
- Budgeted 2019 total capital expenditures of $565 million to
$600 million to be funded entirely within cash flow.
- Forecasted 2019 full year net production is estimated to
average 1,360 MMcfe to 1,400 MMcfe per day, consistent with the
Company’s fourth quarter of 2018 average net production.
- Forecasted 2019 full year free cash flow in excess of $100
million.
- Announced stock repurchase program to acquire up to $400
million of outstanding common stock within the next 24 months.
Since joining Gulfport as President, Chief
Executive Officer and Board member in mid-December 2018, David M.
Wood has worked closely with Gulfport’s executive team and Board of
Directors to finalize the Company’s 2019 capital budget and
operational plan. The Board of Directors met today to provide final
approval of the Company’s plans.
Mr. Wood commented, “The past several weeks have
been a very busy and enjoyable time, immersing myself in the
business by working with our teams as well as speaking with many of
our current shareholders. Gulfport has a bright future and I look
forward to leading the Company in its next phase of development,
anchored by capital discipline and a focus on shareholder
returns.”
Mr. Wood continued, “With the 2019 budget now
published, I want to underscore our commitment to further enhancing
shareholder value with a newly authorized $400 million stock
repurchase program to be executed within the next 24 months. The
authorization follows closely behind the completion of the 2018
previously announced and expanded $200 million share repurchase
program, which concluded in the fourth quarter of 2018. The new
program will be funded through organically generated free cash flow
and anticipated monetizations of certain non-core assets held in
the portfolio today. Should these monetizations be realized earlier
than anticipated, the expected timeline of the repurchase program
is subject to acceleration. In addition, the repurchase program
could be expanded to include any funds received in excess of the
current projected monetizations and would be incremental to the
$400 million share repurchase program announced today.”
“Our forecasted generation of free cash flow
during 2019 is underpinned by our plan to hold fourth quarter of
2018 production relatively constant throughout 2019, allowing us to
maximize and prioritize cash flow available for our share
repurchase program. The current commodity environment is
challenged, with depressed natural gas prices in the near-term, an
uncertain forecast represented in the strip and, as we have
recently experienced, a volatile and unpredictable broader market
sentiment. We feel that prudent capital spending and disciplined
capital allocation are distinguishing features in our business and
couple well with our intention to maintain a strong hedge position
through 2019 and beyond, reducing commodity risk and providing
certainty to anticipated cash flows,” Mr. Wood added.
“Our Ohio and Oklahoma positions are core assets
in our portfolio with the ability to generate and grow attractive
returns with tremendous leverage to any improvements in natural gas
prices. We forecast a year-on-year improvement of approximately
$0.25 cents per Mcf in 2020 would further increase our free cash
flow generation by over $100 million, illustrating the opportunity
created within our core assets. I believe the mid and
long-term outlook for North American natural gas producers is
favorable, however, we must be disciplined and diligent as we move
toward those horizons. I am pleased to provide you with our 2019
budget today and look forward to addressing our plan in more detail
on our fourth quarter and full year 2018 earnings conference call
in late February,” Mr. Wood concluded.
2019 Capital Budget and Production
GuidanceFor 2019, Gulfport estimates its total capital
expenditures will be approximately $565 million to $600 million,
which will be funded entirely within cash flow at current strip
pricing. The 2019 budget includes approximately $525 million to
$550 million for drilling and completion (“D&C”) activities and
approximately $40 million to $50 million for land activities.
With this level of capital spend, Gulfport forecasts its 2019
average daily net production will be in the range of 1,360 MMcfe to
1,400 MMcfe per day, consistent with the Company’s fourth quarter
of 2018 average net production of 1,392.8 Bcfe per day.
Utilizing current strip pricing at the various
regional pricing points at which the Company sells its natural gas,
Gulfport forecasts its realized natural gas price differential,
before the effect of hedges and inclusive of the Company’s firm
transportation expense, will average in the range of $0.49 to $0.66
per Mcf below NYMEX settlement prices in 2019. Gulfport expects its
2019 realized NGL price, before the effect of hedges and including
transportation expense, will be approximately 45% to 50% of WTI and
its 2019 realized oil price will be in the range of $3.00 to $3.50
per barrel below WTI.
Based on current strip pricing, Gulfport’s 2019
activities are expected to generate in excess of $100 million of
free cash flow during 2019.
The table below summarizes the Company’s full
year 2019 guidance:
GULFPORT ENERGY CORPORATION |
COMPANY GUIDANCE |
|
|
Year Ending |
|
|
12/31/2019 |
|
|
Low |
|
High |
Forecasted Production |
|
|
|
|
Average Daily Gas
Equivalent (MMcfepd) |
|
1,360 |
|
|
|
1,400 |
|
|
% Gas |
~ 90% |
|
% Natural Gas
Liquids |
~ 7% |
|
% Oil |
~ 3% |
|
|
|
|
|
Forecasted Realizations (before the effects of
hedges) |
|
|
|
|
Natural Gas
(Differential to NYMEX Settled Price) - $/Mcf |
($ |
0.49 |
) |
|
($ |
0.66 |
) |
|
NGL (% of WTI) |
|
45 |
% |
|
|
50 |
% |
|
Oil (Differential to
NYMEX WTI) $/Bbl |
($ |
3.00 |
) |
|
($ |
3.50 |
) |
|
|
|
|
|
Projected Operating Costs |
|
|
|
|
Lease Operating Expense
- $/Mcfe |
$ |
0.15 |
|
|
$ |
0.17 |
|
|
Production Taxes -
$/Mcfe |
$ |
0.06 |
|
|
$ |
0.07 |
|
|
Midstream Gathering and
Processing - $/Mcfe |
$ |
0.53 |
|
|
$ |
0.58 |
|
|
General and
Administrative - $/Mcfe |
$ |
0.09 |
|
|
$ |
0.11 |
|
|
|
|
|
|
|
|
Total |
Budgeted D&C Expenditures - In Millions: |
$ |
525 |
|
|
$ |
550 |
|
|
|
|
|
|
Budgeted Land Expenditures - In Millions: |
$ |
40 |
|
|
$ |
50 |
|
|
|
|
|
|
Total Capital Expenditures - In Millions: |
$ |
565 |
|
|
$ |
600 |
|
|
|
|
|
|
Net
Wells Drilled |
|
|
|
|
Utica - Operated |
|
10 |
|
|
|
11 |
|
|
Utica -
Non-Operated |
|
2 |
|
|
|
3 |
|
|
Total |
|
12 |
|
|
|
14 |
|
|
|
|
|
|
|
SCOOP - Operated |
|
7 |
|
|
|
8 |
|
|
SCOOP -
Non-Operated |
|
1 |
|
|
|
2 |
|
|
Total |
|
8 |
|
|
|
10 |
|
|
|
|
|
|
Net
Wells Turned-to-Sales |
|
|
|
|
Utica - Operated |
|
40 |
|
|
|
45 |
|
|
Utica -
Non-Operated |
|
2 |
|
|
|
3 |
|
|
Total |
|
42 |
|
|
|
48 |
|
|
|
|
|
|
|
SCOOP - Operated |
|
14 |
|
|
|
15 |
|
|
SCOOP -
Non-Operated |
|
1 |
|
|
|
2 |
|
|
Total |
|
15 |
|
|
|
17 |
|
2019 Operational Outlook
Utica ShaleDuring 2019,
Gulfport plans to run on average approximately 1.0 operated
horizontal rig in the Utica Shale. Gulfport has budgeted to drill
approximately 13 to 15 gross (10 to 11 net) horizontal Utica wells
with an average lateral length of 11,700 feet. In addition,
Gulfport plans to turn-to-sales 47 to 51 gross and (40 to 45 net)
horizontal Utica wells with an average lateral length of 10,000
feet.
Gulfport intends to participate in non-operated
activities taking place on its acreage by other operators that plan
to drill approximately 2 to 3 horizontal wells and turn-to-sales 2
to 3 horizontal wells, in each case net to Gulfport’s interest.
SCOOPDuring 2019, Gulfport
plans to run on average approximately 1.5 operated horizontal rigs
in the SCOOP. Gulfport has budgeted to drill approximately 9 to 10
gross (7 to 8 net) horizontal SCOOP wells with an average lateral
length of 8,800 feet. In addition, Gulfport plans to turn-to-sales
15 to 17 gross and (14 to 15 net) horizontal SCOOP wells with an
average lateral length of 8,000 feet.
Gulfport intends to participate in non-operated
activities taking place on its acreage by other operators that plan
to drill approximately 1 to 2 horizontal wells and turn-to-sales 1
to 2 horizontal wells, in each case net to Gulfport’s interest.
Newly Authorized Stock Repurchase
ProgramUpon completing the previously announced and
expanded stock repurchase program of $200 million during 2018,
Gulfport announced today that its board of directors has approved a
stock repurchase program to acquire up to $400 million of its
outstanding common stock within the next 24 months. Purchases
under the repurchase program may be made from time to time in open
market or privately negotiated transactions, and will be subject to
market conditions, applicable legal requirements, contractual
obligations and other factors. The repurchase program does not
require the Company to acquire any specific number of shares. The
Company intends to purchase shares under the repurchase program
opportunistically with available funds while maintaining sufficient
liquidity to fund its 2019 capital development program. This
repurchase program is authorized to extend through December 31,
2020 and may be suspended from time to time, accelerated, modified,
extended or discontinued by the board of directors at any time.
About GulfportGulfport 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 an acreage position along the Louisiana
Gulf Coast, has 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 Exchange Act. 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, future
capital expenditures (including the amount and nature thereof),
business strategy and measures to implement strategy, 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; 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, 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.
Investor Contact:Jessica Wills
– Director, Investor Relations
jwills@gulfportenergy.com405-252-4550
Media Contact:Adam Weiner /
Cameron NjaaKekst
CNCadam.weiner@kekstcnc.com / cameron.njaa@kekstcnc.com212-521-4800
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