Gulfport Energy Corporation (NASDAQ:GPOR) (“Gulfport” or the
“Company”) today reported financial and operational results for the
quarter ended March 31, 2017 and provided an update on its
2017 activities. Key information for the first quarter of
2017 includes the following:
- Net production averaged 849.6 MMcfe per day, an 8% increase
over the fourth quarter of 2016 and a 23% increase versus the first
quarter of 2016.
- Realized natural gas price, before the impact of derivatives
and including transportation costs, averaged $2.68 per Mcf, a $0.63
per Mcf differential to the average trade month NYMEX settled
price.
- Realized oil price, before the impact of derivatives and
including transportation costs, averaged $47.52 per barrel, a $4.34
per barrel differential to the average WTI oil price.
- Realized natural gas liquids price, before the impact of
derivatives and including transportation costs, averaged $26.46 per
barrel, or $0.63 per gallon.
- Net income of $154.5 million, or $0.91 per diluted share.
- Adjusted net income (as defined and reconciled below) of $53.9
million, or $0.32 per diluted share.
- Adjusted EBITDA (as defined and reconciled below) of $143.6
million.
- Reduced unit lease operating expense for the first quarter of
2017 by 9% to $0.25 per Mcfe from $0.28 per Mcfe for the fourth
quarter of 2016.
- Closed acquisition of core SCOOP assets from Vitruvian II
Woodford, LLC ("Vitruvian") on February 17, 2017.
- Increasing expected realized oil price and now estimate that
the Company's 2017 realized oil price will be in the range of $3.75
to $4.75 per barrel below WTI.
- Increasing expected realized natural gas liquids price and now
estimate that the Company's 2017 realized natural gas liquids
price will be approximately 45% of WTI.
- Recent two-well wet gas pad in southern Grady County, OK
turned-to-sales with the Vinson 2-22X27H averaging a 24-hour
initial production rate of 14.6 MMcf per day and 57 barrels of oil
per day and the Vinson 3R-22X27H averaging a 24-hour initial
production rate of 16.9 MMcf per day and 48 barrels of oil per
day.
- Expect to spud both a Springer and Sycamore location in the
SCOOP during the summer of 2017.
Chief Executive Officer and President, Michael G. Moore
commented, "The first quarter was an eventful quarter for
Gulfport, experiencing yet another solid quarter operationally,
driven by our assets in the Utica Shale and closing of the
acquisition of the SCOOP assets from Vitruvian, which provides
Gulfport sizeable core positions in two of North America’s lowest
cost natural gas basins. Subsequent to the quarter, we completed
and turned-to-sales two gross SCOOP wells located in the wet gas
window in Southern Grady County, marking Gulfport’s first
completions in the play. We have witnessed several key indicators
during the flowback of the wells that indicate these wells to be
top performers relative to their offsets, outperforming the average
of direct offset producers by approximately 30% and outperforming
our current SCOOP wet gas type curve by as much as 35%. Bear in
mind, we are still early in the flowback process and would expect
these wells to continue to clean up and potentially improve further
beyond the rates provided today. We are extremely pleased with the
results from these new wells and would expect both of the wells to
rank among the top wells completed in the play to date."
Financial Results For the first quarter of
2017, Gulfport reported net income of $154.5 million, or $0.91 per
diluted share, on revenues of $333.0 million. For the first
quarter of 2017, EBITDA (as defined and reconciled below) was
$244.2 million and cash flow from operating activities before
changes in operating assets and liabilities (as defined and
reconciled below) was $121.7 million. Gulfport’s GAAP net
income for the first quarter of 2017 includes the following
items:
- Aggregate non-cash derivative gain of $106.8 million.
- Aggregate expense of $1.3 million in connection with the
acquisition of oil and natural gas assets from Vitruvian.
- Aggregate loss of $4.9 million in connection with Gulfport's
equity interests in certain equity investments.
Excluding the effect of these items, Gulfport’s
financial results for the first quarter of 2017 would have been as
follows:
- Adjusted oil and gas revenues of $226.2 million.
- Adjusted net income of $53.9 million, or $0.32 per diluted
share.
- Adjusted EBITDA of $143.6 million.
Production and Realized Prices Gulfport’s
net daily production for the first quarter of 2017 averaged
approximately 849.6 MMcfe per day. For the first quarter of 2017,
Gulfport’s net daily production mix was comprised of approximately
87% natural gas, 9% natural gas liquids ("NGL") and 4% oil.
Gulfport’s realized prices for the first quarter
of 2017 were $2.57 per Mcf of natural gas, $47.68 per barrel of oil
and $0.63 per gallon of NGL, resulting in a total equivalent price
of $2.96 per Mcfe. Gulfport's realized prices for the first quarter
of 2017 include an aggregate cash-settled derivative loss of $7.2
million. Before the impact of derivatives, realized prices for the
first quarter of 2017, including transportation costs, were $2.68
per Mcf of natural gas, $47.52 per barrel of oil and $0.63 per
gallon of NGL, for a total equivalent price of $3.05 per Mcfe.
|
GULFPORT ENERGY CORPORATION |
PRODUCTION SCHEDULE |
(Unaudited) |
|
Three months ended |
|
March 31, |
Production
Volumes: |
2017 |
|
2016 |
|
|
|
|
Natural gas (MMcf) |
66,284 |
|
|
53,307 |
|
Oil (MBbls) |
514 |
|
|
602 |
|
NGL (MGal) |
49,667 |
|
|
42,527 |
|
Gas equivalent
(MMcfe) |
76,461 |
|
|
62,993 |
|
Gas equivalent (Mcfe
per day) |
849,569 |
|
|
692,230 |
|
|
|
|
|
Average
Realized Prices: |
|
|
|
(before the
impact of derivatives): |
|
|
|
|
|
|
|
Natural gas (per
Mcf) |
$ |
2.68 |
|
|
$ |
1.39 |
|
Oil (per Bbl) |
$ |
47.52 |
|
|
$ |
26.32 |
|
NGL (per Gal) |
$ |
0.63 |
|
|
$ |
0.22 |
|
Gas equivalent (per
Mcfe) |
$ |
3.05 |
|
|
$ |
1.58 |
|
|
|
|
|
Average
Realized Prices: |
|
|
|
(including cash-settlement of derivatives and excluding
non-cash derivative gain or loss): |
|
|
|
|
Natural gas (per
Mcf) |
$ |
2.57 |
|
|
$ |
2.49 |
|
Oil (per Bbl) |
$ |
47.68 |
|
|
$ |
36.86 |
|
NGL (per Gal) |
$ |
0.63 |
|
|
$ |
0.23 |
|
Gas equivalent (per
Mcfe) |
$ |
2.96 |
|
|
$ |
2.61 |
|
|
|
|
|
|
|
|
|
The table below summarizes Gulfport’s first quarter of 2017
production by asset area:
|
GULFPORT ENERGY CORPORATION |
PRODUCTION BY AREA |
(Unaudited) |
|
|
Three months ended |
|
March 31, |
|
2017 |
Utica
Shale |
|
Natural gas (MMcf) |
61,152 |
|
Oil (MBbls) |
132 |
|
NGL (MGal) |
39,311 |
|
Gas equivalent
(MMcfe) |
67,559 |
|
|
|
SCOOP(1) |
|
Natural gas (MMcf) |
5,115 |
|
Oil (MBbls) |
135 |
|
NGL (MGal) |
10,322 |
|
Gas equivalent
(MMcfe) |
7,398 |
|
|
|
Southern
Louisiana |
|
Natural gas (MMcf) |
8 |
|
Oil (MBbls) |
235 |
|
NGL (MGal) |
— |
|
Gas equivalent
(MMcfe) |
1,416 |
|
|
|
Other |
|
Natural gas (MMcf) |
9 |
|
Oil (MBbls) |
12 |
|
NGL (MGal) |
35 |
|
Gas equivalent
(MMcfe) |
88 |
|
|
|
(1)
SCOOP production included from closing date of February 17,
2017. |
|
2017 Financial Position and
LiquidityFor the three-month period ended March 31,
2017, Gulfport’s drilling and completion capital expenditures
totaled $238.1 million, midstream capital expenditures totaled
$10.0 million and leasehold capital expenditures totaled $12.1
million. Mr. Moore commented, "Gulfport began to increase
completions during the second half of the first quarter, as planned
in our budget provided in February, completing 637 stages during
the quarter and setting up for an active turn-in-line schedule for
the second quarter of 2017."
Gulfport recently completed its spring redetermination under its
revolving credit facility which resulted in its borrowing base
increasing from $700 million to $1 billion, effective May 4,
2017. In connection with this process, Gulfport is pleased to
announce that JP Morgan, Commonwealth Bank of Australia, ABN Amro,
Fifth Third and CIBC have joined as part of the Company's expanded
lender group.
As of March 31, 2017, Gulfport had cash on hand of
approximately $102.5 million. As of March 31, 2017, $40.0
million was outstanding under Gulfport’s revolving credit facility
and $421.3 million was available for borrowing after giving effect
to outstanding letters of credit totaling $238.7 million. Pro forma
for the recent increase in the Company's borrowing base from $700
million to $1 billion, Gulfport would have had $721.3 million of
available borrowing capacity after giving effect to outstanding
letters of credit.
Operational Update
The table below summarizes Gulfport's first quarter of 2017
activity and the number of net wells expected to be drilled and
turned-to-sales for the remainder of 2017:
|
GULFPORT ENERGY CORPORATION |
ACTIVITY SUMMARY |
(Unaudited) |
|
|
|
|
|
Three months ended |
|
|
|
March 31, |
Remaining Wells |
|
Guidance (1) |
|
2017 |
2017 |
|
2017 |
Net Wells
Drilled |
|
|
|
Utica - Operated |
23.5 |
|
47.0 |
|
|
70.5 |
|
Utica -
Non-Operated |
2.0 |
|
8.5 |
|
|
10.5 |
|
Total |
25.5 |
|
55.5 |
|
|
81.0 |
|
|
|
|
|
SCOOP - Operated |
4.2 |
|
12.8 |
|
|
17.0 |
|
SCOOP -
Non-Operated |
0.5 |
|
1.0 |
|
|
1.5 |
|
Total |
4.7 |
|
13.8 |
|
|
18.5 |
|
|
|
|
|
Net Wells
Turned-to-Sales |
|
|
|
Utica - Operated |
4.7 |
|
59.3 |
|
|
64.0 |
|
Utica -
Non-Operated |
0.6 |
|
8.9 |
|
|
9.5 |
|
Total |
5.3 |
|
68.2 |
|
|
73.5 |
|
|
|
|
|
SCOOP - Operated |
— |
|
15.0 |
|
|
15.0 |
|
SCOOP -
Non-Operated |
0.2 |
|
1.3 |
|
|
1.5 |
|
Total |
0.2 |
|
16.3 |
|
|
16.5 |
|
|
|
|
|
(1)
Utilizes mid-point of publicly provided 2017 guidance |
|
Utica ShaleIn the Utica Shale,
during the first quarter of 2017, Gulfport spud 26 gross (23.5 net)
wells. The wells drilled during the first quarter of 2017 had an
average lateral length of approximately 8,145 feet and average
drilling days from spud to rig release of approximately 20.9 days.
In addition, Gulfport turned-to-sales five gross (4.7 net) operated
wells with an average lateral length of approximately 9,341 feet
and average of approximately 4.7 stages completed per day.
For the three-month period ended March 31, 2017, Gulfport's
well costs averaged approximately $1,090 per foot of lateral in the
Utica Shale.
During the first quarter of 2017, net production
from Gulfport’s Utica acreage averaged approximately 750.7 MMcfe
per day, a decrease of 2% over the fourth quarter of 2016 and an
increase of 12% over the first quarter of 2016.
At present, Gulfport has six operated horizontal
rigs drilling in the play.
SCOOPIn the SCOOP, during the
first quarter of 2017, five gross (4.2 net) wells were spud on the
acreage. The wells drilled during the first quarter of 2017 had an
average lateral length of 7,856 and average drilling days from spud
to rig release of approximately 62.4 days. During the period
February 17, 2017 (the date Gulfport completed its acquisition of
the acreage) through March 31, 2017, net production from the
acreage averaged approximately 172.0 MMcfe per day.
Subsequent to the first quarter of 2017,
Gulfport turned-to-sales two gross (1.2 net) wells located in the
wet gas window in southern Grady County. The Vinson 2-22X27H has a
lateral length of 8,539 feet and a 24-hour initial production rate
of 14.6 MMcf per day and 57 barrels of oil per day. The Vinson
3R-22X27H has a lateral length of 8,475 feet and a 24-hour initial
production rate of 16.9 MMcf per day and 48 barrels of oil per
day.
In addition to approximately 46,400 net Woodford reservoir
acres, Gulfport holds approximately 38,600 net Springer reservoir
acres and approximately 40,000 net Sycamore reservoir acres.
Gulfport plans to spud both a Springer and Sycamore location on the
acreage during the summer of 2017.
At present, Gulfport has four operated
horizontal rigs drilling in the play.
Southern LouisianaAt its West
Cote Blanche Bay and Hackberry fields, during the first quarter of
2017, Gulfport spud three wells and performed 39 recompletions at
the fields. Net production during the first quarter of 2017 totaled
approximately 15.7 MMcfe per day.
2017 Capital Budget and Production
Guidance Gulfport reaffirms its 2017 capital budget
and production guidance.
Gulfport increases its expected realized NGL
price and realized oil price. Gulfport now expects that its 2017
realized NGL price, before the effect of hedges and including
transportation expense, will be approximately 45% of WTI and its
2017 realized oil price will be in the range of $3.75 to $4.75 per
barrel below WTI.
The table below summarizes the Company’s full
year 2017 guidance:
|
GULFPORT ENERGY CORPORATION |
COMPANY GUIDANCE |
|
|
|
|
|
Year Ending |
|
2017 |
|
Low |
|
High |
Forecasted
Production |
|
|
|
Average
Daily Gas Equivalent (MMcfepd) |
1,045 |
|
|
1,100 |
|
%
Gas |
~88% |
% Natural
Gas Liquids |
~8% |
%
Oil |
~4% |
|
|
|
|
Forecasted
Realizations (before the effects of hedges) (1) |
|
|
|
Natural
Gas (Differential to NYMEX Settled Price) - $/Mcf |
$ |
(0.56 |
) |
|
$ |
(0.62 |
) |
NGL (% of
WTI) |
~45% |
Oil
(Differential to NYMEX WTI) $/Bbl |
$ |
(3.75 |
) |
|
$ |
(4.75 |
) |
|
|
|
|
Projected
Operating Costs |
|
|
|
Lease
Operating Expense - $/Mcfe |
$ |
0.18 |
|
|
$ |
0.23 |
|
Production Taxes - $/Mcfe |
$ |
0.08 |
|
|
$ |
0.09 |
|
Midstream
Gathering and Processing - $/Mcfe |
$ |
0.55 |
|
|
$ |
0.62 |
|
General
and Administrative - $/Mcfe |
$ |
0.15 |
|
|
$ |
0.17 |
|
|
|
|
|
Depreciation,
Depletion and Amortization - $/Mcfe |
$ |
0.95 |
|
|
$ |
1.05 |
|
|
|
|
|
|
Total |
Budgeted
D&C Expenditures - In Millions: |
|
|
|
Operated |
$ |
720 |
|
|
$ |
780 |
|
Non-Operated |
$ |
125 |
|
|
$ |
135 |
|
Total
Budgeted E&P Capital Expenditures |
$ |
845 |
|
|
$ |
915 |
|
|
|
|
|
Budgeted
Midstream Expenditures - In Millions: |
$ |
50 |
|
|
$ |
60 |
|
|
|
|
|
Budgeted
Leasehold Expenditures - In Millions: |
$ |
110 |
|
|
$ |
120 |
|
|
|
|
|
Total Capital
Expenditures - In Millions: |
$ |
1,005 |
|
|
$ |
1,095 |
|
|
|
|
|
Net Wells
Drilled |
|
|
|
Utica -
Operated |
67 |
|
|
74 |
|
Utica -
Non-Operated |
10 |
|
|
11 |
|
Total |
77 |
|
|
85 |
|
|
|
|
|
SCOOP -
Operated |
16 |
|
|
18 |
|
SCOOP -
Non-Operated |
1 |
|
|
2 |
|
Total |
17 |
|
|
20 |
|
|
|
|
|
Net Wells
Turned-to-Sales |
|
|
|
Utica -
Operated |
61 |
|
|
67 |
|
Utica -
Non-Operated |
9 |
|
|
10 |
|
Total |
70 |
|
|
77 |
|
|
|
|
|
SCOOP -
Operated |
14 |
|
|
16 |
|
SCOOP -
Non-Operated |
1 |
|
|
2 |
|
Total |
15 |
|
|
18 |
|
|
|
|
|
|
|
Derivatives Gulfport has hedged 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 sets forth the Company's hedging positions as of
May 8, 2017.
|
GULFPORT ENERGY CORPORATION |
COMMODITY DERIVATIVES - HEDGE
POSITION |
(Unaudited) |
|
|
|
|
|
|
|
2Q2017 |
|
3Q2017 |
|
4Q2017 |
Natural
gas: |
|
|
|
|
|
Swap contracts
(NYMEX) |
|
|
|
|
|
Volume (BBtupd) |
527 |
|
|
568 |
|
|
635 |
|
Price ($ per
MMBtu) |
$ |
3.22 |
|
|
$ |
3.17 |
|
|
$ |
3.17 |
|
|
|
|
|
|
|
Swaption contracts
(NYMEX) |
|
|
|
|
|
Volume (BBtupd) |
65 |
|
|
65 |
|
|
65 |
|
Price ($ per
MMBtu) |
$ |
3.11 |
|
|
$ |
3.11 |
|
|
$ |
3.11 |
|
|
|
|
|
|
|
Basis Swap
Contract (Tetco M2) |
|
|
|
|
|
Volume (BBtupd) |
— |
|
|
— |
|
|
— |
|
Differential ($ per
MMBtu) |
$ |
— |
|
|
$ |
— |
|
|
— |
|
|
|
|
|
|
|
Basis Swap
Contract (NGPL MC) |
|
|
|
|
|
Volume (BBtupd) |
50 |
|
|
50 |
|
|
50 |
|
Differential ($ per
MMBtu) |
$ |
(0.26 |
) |
|
$ |
(0.26 |
) |
|
$ |
(0.26 |
) |
|
|
|
|
|
|
Oil: |
|
|
|
|
|
Swap contracts
(LLS) |
|
|
|
|
|
Volume (Bblpd) |
2,000 |
|
|
1,500 |
|
|
1,500 |
|
Price ($ per Bbl) |
$ |
51.10 |
|
|
$ |
53.12 |
|
|
$ |
53.12 |
|
|
|
|
|
|
|
Swap contracts
(WTI) |
|
|
|
|
|
Volume (Bblpd) |
3,330 |
|
|
4,500 |
|
|
4,500 |
|
Price ($ per Bbl) |
$ |
55.18 |
|
|
$ |
54.89 |
|
|
$ |
54.89 |
|
|
|
|
|
|
|
NGL: |
|
|
|
|
|
C3 Propane Swap
Contracts |
|
|
|
|
|
Volume (Bblpd) |
3,000 |
|
|
3,000 |
|
|
3,000 |
|
Price ($ per Gal) |
$ |
0.63 |
|
|
$ |
0.63 |
|
|
$ |
0.63 |
|
|
|
|
|
|
|
C5+ Swap Contracts |
|
|
|
|
|
Volume (Bblpd) |
250 |
|
|
250 |
|
|
250 |
|
Price ($ per Gal) |
$ |
1.17 |
|
|
$ |
1.17 |
|
|
$ |
1.17 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
2017 |
|
2018 |
|
2019 |
Natural
gas: |
|
|
|
|
|
Swap contracts
(NYMEX) |
|
|
|
|
|
Volume (BBtupd) |
555 |
|
|
609 |
|
|
20 |
|
Price ($ per
MMBtu) |
$ |
3.18 |
|
|
$ |
3.09 |
|
|
$ |
3.14 |
|
|
|
|
|
|
|
Swaption contracts
(NYMEX) |
|
|
|
|
|
Volume (BBtupd) |
60 |
|
|
80 |
|
|
5 |
|
Price ($ per
MMBtu) |
$ |
3.12 |
|
|
$ |
3.29 |
|
|
$ |
3.16 |
|
|
|
|
|
|
|
Basis Swap
Contract (Tetco M2) |
|
|
|
|
|
Volume (BBtupd) |
12 |
|
|
— |
|
|
— |
|
Differential ($ per
MMBtu) |
$ |
(0.59 |
) |
|
— |
|
|
— |
|
|
|
|
|
|
|
Basis Swap
Contract (NGPL MC) |
|
|
|
|
|
Volume (BBtupd) |
38 |
|
|
12 |
|
|
— |
|
Differential ($ per
MMBtu) |
$ |
(0.26 |
) |
|
$ |
(0.26 |
) |
|
$ |
— |
|
|
|
|
|
|
|
Oil: |
|
|
|
|
|
Swap contracts
(LLS) |
|
|
|
|
|
Volume (Bblpd) |
1,748 |
|
|
— |
|
|
— |
|
Price ($ per Bbl) |
$ |
51.97 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
Swap contracts
(WTI) |
|
|
|
|
|
Volume (Bblpd) |
3,353 |
|
|
899 |
|
|
— |
|
Price ($ per Bbl) |
$ |
54.98 |
|
|
$ |
55.31 |
|
|
$ |
— |
|
|
|
|
|
|
|
NGL: |
|
|
|
|
|
C3 Propane Swap
Contracts |
|
|
|
|
|
Volume (Bblpd) |
2,545 |
|
|
— |
|
|
— |
|
Price ($ per Gal) |
$ |
0.64 |
|
|
$ |
— |
|
|
$ |
— |
|
|
|
|
|
|
|
C5+ Swap Contracts |
|
|
|
|
|
Volume (Bblpd) |
250 |
|
|
— |
|
|
— |
|
Price ($ per Gal) |
$ |
1.17 |
|
|
— |
|
|
— |
|
|
|
|
|
|
|
|
|
|
|
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 Call Gulfport
will hold a conference call on Tuesday, May 9, 2017 at 8:00
a.m. CDT to discuss its first quarter of 2017 financial and
operational results and to provide an update on the Company’s
recent activities.
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 13622396. 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 an acreage position along the
Louisiana Gulf Coast, a position in the Alberta Oil Sands in Canada
through its 25% interest in Grizzly Oil Sands ULC and has an
approximately 24% equity interest in Mammoth Energy Services, Inc.
(NASDAQ:TUSK). For more information, please visit
www.gulfportenergy.com.
Forward Looking StatementsThis
press release includes "forward-looking statements" within the
meaning of Section 27A of the Securities Act of 1933, as amended
(the "Securities Act"), and Section 21E of the Securities Exchange
Act of 1934, as amended (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; 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
(including the properties recently acquired from Vitruvian) 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 news 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.
Non-GAAP Financial
MeasuresEBITDA is a non-GAAP financial measure equal to
net income (loss), 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 (gain)
loss, acquisition expense, impairment of Grizzly equity investment
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. Adjusted net income is a non-GAAP financial measure
equal to pre-tax net loss less non-cash derivative (gain) loss,
impairment of oil and gas properties, acquisition expense,
impairment of Grizzly equity investment and (income) loss from
equity method investments plus tax benefit excluding adjustments.
The Company has presented EBITDA and adjusted EBITDA 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 and cash flow from
operating activities before changes in operating assets and
liabilities 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
dividends, 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 and cash flow from operating activities
before changes in operating assets and liabilities 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 |
CONSOLIDATED STATEMENTS OF
OPERATIONS |
(Unaudited) |
|
|
Three months ended March 31, |
|
2017 |
|
2016 |
|
|
|
|
|
|
|
|
|
(In thousands, except share data) |
Revenues: |
|
|
|
Gas
sales |
$ |
177,837 |
|
|
$ |
74,094 |
|
Oil and
condensate sales |
24,411 |
|
|
15,839 |
|
Natural
gas liquid sales |
31,179 |
|
|
9,293 |
|
Net gain
on gas, oil and NGL derivatives |
99,577 |
|
|
57,735 |
|
|
333,004 |
|
|
156,961 |
|
Costs and
expenses: |
|
|
|
Lease
operating expenses |
19,303 |
|
|
16,657 |
|
Production taxes |
3,906 |
|
|
3,111 |
|
Midstream
gathering and processing |
47,941 |
|
|
37,652 |
|
Depreciation, depletion and amortization |
65,991 |
|
|
65,477 |
|
Impairment of oil and gas properties |
— |
|
|
218,991 |
|
General
and administrative |
12,600 |
|
|
10,620 |
|
Accretion
expense |
282 |
|
|
247 |
|
Acquisition expense |
1,298 |
|
|
— |
|
|
151,321 |
|
|
352,755 |
|
INCOME (LOSS)
FROM OPERATIONS |
181,683 |
|
|
(195,794 |
) |
OTHER (INCOME)
EXPENSE: |
|
|
|
Interest
expense |
23,479 |
|
|
16,023 |
|
Interest
income |
(842 |
) |
|
(94 |
) |
Loss from
equity method investments, net |
4,907 |
|
|
30,737 |
|
Other
income |
(316 |
) |
|
(2 |
) |
|
27,228 |
|
|
46,664 |
|
INCOME (LOSS) BEFORE
INCOME TAXES |
154,455 |
|
|
(242,458 |
) |
INCOME TAX BENEFIT |
— |
|
|
(191 |
) |
NET INCOME
(LOSS) |
$ |
154,455 |
|
|
$ |
(242,267 |
) |
NET INCOME
(LOSS) PER COMMON SHARE: |
|
|
|
Basic |
$ |
0.91 |
|
|
$ |
(2.17 |
) |
Diluted |
$ |
0.91 |
|
|
$ |
(2.17 |
) |
Weighted average common
shares outstanding—Basic |
170,272,685 |
|
|
111,509,585 |
|
Weighted average common
shares outstanding—Diluted |
170,488,519 |
|
|
111,509,585 |
|
GULFPORT ENERGY CORPORATION |
CONSOLIDATED BALANCE
SHEETS |
(Unaudited) |
|
|
March 31, 2017 |
|
December 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except share
data) |
Assets |
|
|
|
Current assets: |
|
|
|
Cash and
cash equivalents |
$ |
102,485 |
|
|
$ |
1,275,875 |
|
Restricted cash |
— |
|
|
185,000 |
|
Accounts
receivable—oil and gas |
158,154 |
|
|
136,761 |
|
Accounts
receivable—related parties |
39 |
|
|
16 |
|
Prepaid
expenses and other current assets |
16,005 |
|
|
7,639 |
|
Short-term derivative instruments |
18,925 |
|
|
3,488 |
|
Total
current assets |
295,608 |
|
|
1,608,779 |
|
Property and
equipment: |
|
|
|
Oil and
natural gas properties, full-cost accounting, $3,073,448 and
$1,580,305 excluded from amortization in 2017 and 2016,
respectively |
8,146,321 |
|
|
6,071,920 |
|
Other
property and equipment |
75,107 |
|
|
68,986 |
|
Accumulated depletion, depreciation, amortization and
impairment |
(3,855,629 |
) |
|
(3,789,780 |
) |
Property
and equipment, net |
4,365,799 |
|
|
2,351,126 |
|
Other assets: |
|
|
|
Equity
investments |
251,370 |
|
|
243,920 |
|
Long-term
derivative instruments |
23,515 |
|
|
5,696 |
|
Deferred
tax asset |
4,692 |
|
|
4,692 |
|
Other
assets |
12,945 |
|
|
8,932 |
|
Total
other assets |
292,522 |
|
|
263,240 |
|
Total assets |
$ |
4,953,929 |
|
|
$ |
4,223,145 |
|
Liabilities and Stockholders’ Equity |
|
|
|
Current
liabilities: |
|
|
|
Accounts
payable and accrued liabilities |
$ |
406,139 |
|
|
$ |
265,124 |
|
Asset
retirement obligation—current |
195 |
|
|
195 |
|
Short-term derivative instruments |
67,179 |
|
|
119,219 |
|
Current
maturities of long-term debt |
452 |
|
|
276 |
|
Total
current liabilities |
473,965 |
|
|
384,814 |
|
Long-term derivative
instrument |
5,259 |
|
|
26,759 |
|
Asset retirement
obligation—long-term |
41,142 |
|
|
34,081 |
|
Long-term debt, net of
current maturities |
1,631,809 |
|
|
1,593,599 |
|
Total liabilities |
2,152,175 |
|
|
2,039,253 |
|
Commitments and
contingencies |
|
|
|
Preferred stock, $.01
par value; 5,000,000 authorized, 30,000 authorized as redeemable
12% cumulative preferred stock, Series A; 0 issued and
outstanding |
— |
|
|
— |
|
Stockholders’
equity: |
|
|
|
Common
stock - $.01 par value, 200,000,000 authorized, 182,835,801 issued
and outstanding at March 31, 2017 and 158,829,816 at December 31,
2016 |
1,828 |
|
|
1,588 |
|
Paid-in
capital |
4,408,236 |
|
|
3,946,442 |
|
Accumulated other comprehensive loss |
(51,685 |
) |
|
(53,058 |
) |
Retained
deficit |
(1,556,625 |
) |
|
(1,711,080 |
) |
Total
stockholders’ equity |
2,801,754 |
|
|
2,183,892 |
|
Total liabilities and stockholders’ equity |
$ |
4,953,929 |
|
|
$ |
4,223,145 |
|
|
|
|
|
|
|
|
|
GULFPORT ENERGY CORPORATION |
RECONCILIATION OF EBITDA AND CASH
FLOW |
(Unaudited) |
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
(In
thousands) |
|
|
|
|
|
|
Net income (loss) |
$ |
154,455 |
|
|
$ |
(242,267 |
) |
Interest expense |
|
23,479 |
|
|
|
16,023 |
|
Income tax benefit |
|
— |
|
|
|
(191 |
) |
Accretion expense |
|
282 |
|
|
|
247 |
|
Depreciation, depletion
and amortization |
|
65,991 |
|
|
|
65,477 |
|
Impairment of oil and
gas properties |
|
— |
|
|
|
218,991 |
|
EBITDA |
$ |
244,207 |
|
|
$ |
58,280 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Three months ended March 31, |
|
|
2017 |
|
|
2016 |
|
|
|
|
|
|
|
|
|
(In
thousands) |
|
|
|
|
|
|
Cash provided by
operating activity |
$ |
142,645 |
|
|
$ |
83,774 |
|
Adjustments: |
|
|
|
|
|
|
|
Changes
in operating assets and liabilities |
|
(20,943 |
) |
|
|
(548 |
) |
Operating Cash
Flow |
$ |
121,702 |
|
|
$ |
83,226 |
|
|
|
|
|
|
|
|
|
GULFPORT ENERGY CORPORATION |
RECONCILIATION OF ADJUSTED EBITDA |
(Unaudited) |
|
|
|
|
|
|
|
Three months ended |
|
Three Months Ended |
|
March 31, 2017 |
|
March 31, 2016 |
|
|
|
|
|
|
|
|
|
(In
thousands) |
|
|
|
|
|
|
EBITDA |
$ |
244,207 |
|
|
$ |
58,280 |
|
|
|
|
|
|
|
|
|
Adjustments: |
|
|
|
|
|
|
|
Non-cash derivative
(gain) loss |
|
(106,796 |
) |
|
|
7,685 |
|
Acquisition
expense |
|
1,298 |
|
|
|
— |
|
Impairment of Grizzly
equity investment |
|
— |
|
|
|
23,069 |
|
Loss from equity method
investments |
|
4,907 |
|
|
|
7,668 |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Adjusted EBITDA |
$ |
143,616 |
|
|
$ |
96,702 |
|
|
|
|
|
|
|
GULFPORT ENERGY CORPORATION |
RECONCILIATION OF ADJUSTED NET
INCOME |
(Unaudited) |
|
|
|
|
|
|
|
|
|
Three months ended |
|
Three Months Ended |
|
|
March 31, 2017 |
|
March 31, 2016 |
|
|
|
|
|
|
|
|
|
|
|
(In thousands, except
share data) |
|
|
|
|
|
|
|
Pre-tax net loss
excluding adjustments |
|
$ |
154,455 |
|
|
$ |
(242,458 |
) |
Adjustments: |
|
|
|
|
|
|
|
|
Non-cash derivative
(gain) loss |
|
|
(106,796 |
) |
|
|
7,685 |
|
Impairment of oil and
gas properties |
|
|
— |
|
|
|
218,991 |
|
Acquisition
expense |
|
|
1,298 |
|
|
|
— |
|
Impairment of Grizzly
equity investment |
|
|
— |
|
|
|
23,069 |
|
Loss from equity method
investments |
|
|
4,907 |
|
|
|
7,668 |
|
Pre-tax net income
excluding adjustments |
|
$ |
53,864 |
|
|
$ |
14,955 |
|
|
|
|
|
|
|
|
|
|
Tax benefit excluding
adjustments |
|
|
— |
|
|
|
(191 |
) |
|
|
|
|
|
|
|
|
|
Adjusted net
income |
|
$ |
53,864 |
|
|
$ |
15,146 |
|
|
|
|
|
|
|
|
|
|
Adjusted net income per
common share: |
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic |
|
$ |
0.32 |
|
|
$ |
0.14 |
|
|
|
|
|
|
|
|
|
|
Diluted |
|
$ |
0.32 |
|
|
$ |
0.14 |
|
|
|
|
|
|
|
|
Basic weighted average
shares outstanding |
|
|
170,272,685 |
|
|
|
111,509,585 |
|
|
|
|
|
|
|
|
Diluted weighted
average shares outstanding |
|
|
170,488,519 |
|
|
|
111,509,585 |
|
Investor & Media Contact:
Jessica Wills – Manager, Investor Relations and Research
jwills@gulfportenergy.com
405-252-4550
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